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What does the future look like for Berkshire Hathaway without Warren Buffett? · The Financial Exchange Show

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Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
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Speaker 1: and Mike Armstrong.
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Speaker 2: Chuck, Mike, and talker with you here on the first
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Speaker 2: trading day of twenty twenty six. I hope you all
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Speaker 2: are off to a great start this year. But I
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Speaker 2: got to tell you markets, they h no Santa Claus rally, No,
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Speaker 2: They're going off flip floppy big.
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Speaker 3: One on Monday. If you're gonna get anything out of
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Speaker 3: this one.
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Speaker 2: Yeah, which again, who knows, Like what's gonna happen on Monday,
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Speaker 2: because quite honestly, today pretty low volume day. I gotta
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Speaker 2: be honest, I'm a little messed up today, like more
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Speaker 2: than normal. You know, it's it's not Friday.
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Speaker 4: Yeah, I thought yesterday was Saturday.
1:47
Speaker 2: My alarm went off this morning.
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Speaker 4: I work tomorrow.
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Speaker 2: What Yeah, my alarm went off this morning. I'm like,
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Speaker 2: oh good, it's Monday. And then I'm driving in I'm like,
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Speaker 2: wait a minute, I don't have to work tomorrow. That yeah.
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Speaker 4: Not a fan of this holiday schedule, I.
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Speaker 2: Kind of I am, actually, I know, I enjoy having
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Speaker 2: weeks split up by back to back holidays makes it
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Speaker 2: rather quiet.
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Speaker 5: Yeah, I'm a fan as well, But yeah, I mean, look,
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Speaker 5: consuming your body weight and alcohol and sugar over the
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Speaker 5: course of the last week and a half will do.
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Speaker 2: That to you.
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Speaker 4: How's that different from any other weeks?
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Speaker 2: Yeah? Question what your body weight in alcohol? That would
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Speaker 2: be a lot because you're not sugar the sugar. Well,
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Speaker 2: I mean that's a lot of sugar too. What do
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Speaker 2: you think is worse for you your body weight and
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Speaker 2: alcohol or body weight in sugar?
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Speaker 4: Sugar?
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Speaker 2: Alcohol is technically a kind of sugar, I believe. Trick
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Speaker 2: question in any case, the markets right now that we're good. Well,
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Speaker 2: here's the thing. If you have your body weight and alcohol,
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Speaker 2: you're not alive. So it's probably that Gemini, I'll tell us.
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Speaker 2: Oh yeah, doctor Gemini, what do you have to say
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Speaker 2: on this? Uh? Okay, while we're on the tangent, did
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Speaker 2: you know that in Utah most states it's ab alcohol
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Speaker 2: by volume. Utah is ABW. If you bring it's alcohol
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Speaker 2: by weight, and because alcohol weighs less than water, you
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Speaker 2: actually get a They limit the alcohol concentration, but it's
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Speaker 2: by weight, not by volume, and so you actually get
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Speaker 2: more than the equivalent ABV.
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Speaker 5: Gemini is telling me that consuming your body weight and
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Speaker 5: alcohol over the course of a week is almost certainly fatal.
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Speaker 2: Yes, I believe that, but like likewise, if i'd like
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Speaker 2: one hundred and seventy pounds of sugar, I can't imagine
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Speaker 2: that being good for me either.
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Speaker 3: Yeah, yeah, Well, don't know until you're.
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Speaker 2: Dry, and don't Neither one's great. The sp five hundred
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Speaker 2: down eight points, about a tenth of a percent. The
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Speaker 2: Dow is up forty seven points, about a tenth of
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Speaker 2: a percent. The Nasdaq Composite down seventy two points a
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Speaker 2: third of a percent. Big reversal in mag seven names
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Speaker 2: over the last twenty thirty minutes. Haven't seen any news
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Speaker 2: driving it, but this is, you know, kind of what
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Speaker 2: we're seeing here as of this point ten. Your Treasury
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Speaker 2: up two point six basis points to four point one
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Speaker 2: seventy nine percent, So just continuing to flutter in that
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Speaker 2: four to one to four two range. Dollar index down
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Speaker 2: point one two percent to ninety seven ninety two. We've
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Speaker 2: got gold up another seven eighty and ounce to forty
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Speaker 2: three forty eight and sixty cents, and we've got crude
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Speaker 2: oil down sixty five cents a barrel to fifty six
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Speaker 2: seventy seven, and the TRIPA national avatur gas price is
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Speaker 2: down another three tenths of ascent. We're at two point
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Speaker 2: eighty three, so continuing to see falling gas prices nationwide,
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Speaker 2: which if we happen to be listening to us on
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Speaker 2: the road and you don't work in the energy industry,
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Speaker 2: you're very appreciative of those who work in the energy
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Speaker 2: industry are kind of like, yeah, yeah, just a good brunt.
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Speaker 5: I'll just throw out there that if we don't get
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Speaker 5: a reversal on Monday with stocks up, be prepared for
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Speaker 5: all the articles that are going to be written on
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Speaker 5: Tuesday and over the course of the following few weeks
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Speaker 5: about what happens when you don't get a Santa Claus
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Speaker 5: rally historically and what you should do with your portfolio now,
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Speaker 5: And I urge you with the strongest sense to ignore.
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Speaker 3: All of them.
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Speaker 4: It'll be the lead of the show on Tuesday.
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Speaker 2: Yeah, So if that happened, will stocks we will money again?
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Speaker 2: And ignore it?
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Speaker 3: Yeah?
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Speaker 2: What to do when your portfolio is down for four days?
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Speaker 3: Right?
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Speaker 2: Remember?
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Speaker 5: I mean this is precisely what happened last year, wasn't
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Speaker 5: it saying it was two years ago? I think it
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Speaker 5: was twenty twenty four, I don't remember, But the first
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Speaker 5: like five days of the year were bad, is right?
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Speaker 5: What about how when the markets go down for the
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Speaker 5: first like two days of the year, everything terrible happens,
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Speaker 5: and then we got double digit returns.
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Speaker 2: Of course, gotta say, like, let's I'm glad that you
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Speaker 2: brought this up to a certain extent if you look
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Speaker 2: at S and P performance, uh, just on an annual basis,
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Speaker 2: here in terms of what we've seen recently, like we
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Speaker 2: got to like, be honest, twenty twenty three up twenty
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Speaker 2: four percent, YEP, twenty twenty four up twenty three percent,
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Speaker 2: twenty twenty five up sixteen percent. That's like back to
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Speaker 2: back to back, pretty darn good performance. The only string
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Speaker 2: in recent history that is continued, you know, kind of
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Speaker 2: beyond a three year stretch of anything like this. I
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Speaker 2: know you don't want me to say it. It's the
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Speaker 2: tech bubble. Aside from that, the next closest one that
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Speaker 2: we have was twenty nineteen twenty and twenty one, and
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Speaker 2: I think we can all admit that twenty twenty and
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Speaker 2: twenty one might have been caused by a fiscal stimulus
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Speaker 2: that isn't coming back anytime soon. But like you look,
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Speaker 2: aside from this, it's pretty much tech bubble or bust
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Speaker 2: in terms of three year stretches that you have, you know,
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Speaker 2: in this kind of company. The only other thing that's
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Speaker 2: maybe comparable, and again I say maybe just because you
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Speaker 2: really got to cram most of the performance into two
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Speaker 2: years is nineteen fifty four and nineteen fifty five, where
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Speaker 2: you went forty five percent and then twenty six percent
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Speaker 2: back to back years. Other than that, we're in pretty
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Speaker 2: rarefied air. And that's why I really wanted to cover
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Speaker 2: the piece talking about how retail traders or this new
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Speaker 2: you know, so that's okay, let me let me go
7:27
Speaker 2: get it because I put it somewhere. Do you have it?
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Speaker 5: Yeah, there is a Wall Street Journal piece that everyday
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Speaker 5: traders have gone from the fringe players to dominant market force.
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Speaker 5: They drove major returns and reversals in markets this year
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Speaker 5: or sorry, it's last year. For instance, during the tariff
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Speaker 5: related fiasco in markets in April.
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Speaker 3: They are being.
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Speaker 5: Held responsible for some of the big rallies in commodity prices.
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Speaker 5: And you know, certainly you can point to them over
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Speaker 5: the last few years during the twenty twenty one meme craze.
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Speaker 5: And so are they some now permanent fixture or are
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Speaker 5: they just waiting to be washed out?
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Speaker 3: With the next crisis.
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Speaker 2: Yes, And what I mean by that is, I do
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Speaker 2: think so you saw these pieces published during the tech
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Speaker 2: bubble as well about you know, all these people that
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Speaker 2: you know started making more and more money trading and
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Speaker 2: you know, blah blah blah, and uh, it's you know,
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Speaker 2: it's a new paradigm and it's a new world. And
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Speaker 2: you know this was back when each trade was you know,
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Speaker 2: kicking down the doors and giving average people access to
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Speaker 2: markets that they didn't have before. And I do think
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Speaker 2: it's true that this is going to be a group
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Speaker 2: of people that does continue to grow and you know,
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Speaker 2: trade more and become more of a force. But here's
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Speaker 2: the other thing. This is also happening against the backdrop
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Speaker 2: of one of the best three year returns in markets
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Speaker 2: that we have ever seen. And they don't ring a
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Speaker 2: bell at the top, but they do write articles. And
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Speaker 2: this is the kind of stuff that you start to
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Speaker 2: read when people start getting a little too exuberant and
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Speaker 2: a little too confident that they are doing something as
9:15
Speaker 2: opposed to conditions have existed that have enabled them to
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Speaker 2: do something that might not exist permanently. So if you're
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Speaker 2: out there and you believe that the market is going
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Speaker 2: to return twenty percent annualized going forward. You're a little
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Speaker 2: bit more optimistic than me. You just are, because ultimately,
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Speaker 2: there are two ways for markets to return twenty percent
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Speaker 2: in a year. Earnings have to go up by that much,
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Speaker 2: or multiples have to expand, and eventually you run out
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Speaker 2: of ways for earnings to go up that much while
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Speaker 2: actual humans can still have money to spend, and likewise,
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Speaker 2: you get to a point where multiples expand to the
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Speaker 2: point where people say, Nope, that's good, I finally had enough.
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Speaker 2: I'm not saying that like we're done. Like, maybe you
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Speaker 2: do have another twenty percent year this year. It's it's possible. Sure,
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Speaker 2: the tech bubble had a five year stretch where it
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Speaker 2: averaged more than twenty percent for the S and P
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Speaker 2: five hundred, so like this could continue, but it won't
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Speaker 2: be forever.
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Speaker 3: Nothing's forever.
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Speaker 2: Check And that's my point is the success that these
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Speaker 2: retail traders have had the last couple of years is
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Speaker 2: not going to be a permanent fixture because markets just
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Speaker 2: aren't going to do this forever. They can't. I wish
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Speaker 2: that they could. It would make all of our lives
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Speaker 2: a lot easier and better, but I just don't believe that.
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Speaker 2: You know, that's gonna be what we see quick break here.
10:43
Speaker 2: When we come back, we've got trivia, and then we're
10:48
Speaker 2: gonna be talking about social security and midterm elections. Why
10:53
Speaker 2: does this matter? We'll tell you right after this.
10:56
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11:35
Speaker 4: All right, Sam for trivia.
11:36
Speaker 6: You're on a Financial exchange and Warren Buffett has officially
11:40
Speaker 6: left his position as CEO of Berkshire Hathaway. The ninety
11:44
Speaker 6: five year old has famously survived and even thrived with
11:47
Speaker 6: his preferred childlike diet. He drinks five twelve ounce cokes
11:51
Speaker 6: every day. So trivia question today, where does Warren Buffett
11:56
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11:59
Speaker 6: does this Warren Buffe get his breakfast from every workday?
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12:16
Speaker 2: Once again.
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12:31
Speaker 2: Uh This fall, in November, Americans will head to the
12:34
Speaker 2: polls for midterm elections and the is it thirty three
12:39
Speaker 2: or thirty four senators? This one? I can't remember which
12:42
Speaker 2: class this is? Oh no, In any case, the thirty
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Speaker 2: three or thirty four senators who are elected this year
12:48
Speaker 2: will serve six year terms just so like every other
12:50
Speaker 2: senator does. The difference is that Social Security the trust
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Speaker 2: Fund is expected to become insolvent late twenty thirty two,
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Speaker 2: at which point the senators that are elected this fall
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Speaker 2: will still have to deal with it. So what's interesting
13:09
Speaker 2: to me is you look at all of the chatter
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Speaker 2: and all of the you know, things that people are
13:15
Speaker 2: talking about from a political perspective, right now, does social
13:20
Speaker 2: Security get mentioned once?
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Speaker 3: Not on the list?
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Speaker 2: And this group of senators will actually have to be
13:30
Speaker 2: have to be instrumental in determining what the program looks
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Speaker 2: like beyond twenty thirty two. Now you might say, oh, chuck,
13:38
Speaker 2: they're not going to do anything, they're lazy, and they're
13:39
Speaker 2: not even going to hold a vote at That's fine,
13:41
Speaker 2: that's still a decision. That's still a decision that they're
13:43
Speaker 2: going to make. But ultimately, there's no one else who
13:48
Speaker 2: is occupying office at the moment that you can guarantee
13:53
Speaker 2: will still be occupying office at that time, aside from
13:57
Speaker 2: these thirty three senators.
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Speaker 5: I suppose something weird could happen where the trust fund
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Speaker 5: doesn't run up by twenty thirty two.
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Speaker 3: So no way to guarantee that.
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Speaker 5: You'd have to see probably a big economic boom over
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Speaker 5: the course of the next.
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Speaker 2: Generally, fiscally we've been on a twenty five year path
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Speaker 2: of worsening, and so it'd be very surprising if it refuses.
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Speaker 5: For I just I just want to acknowledge that it's
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Speaker 5: not technically a guarantee. It's an estimate of when it
14:20
Speaker 5: will run out. I'd be willing to bet it runs
14:22
Speaker 5: out sooner.
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Speaker 2: But like when I started this job, I think it
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Speaker 2: was twenty thirty four thirty five that was projected to
14:28
Speaker 2: run out, and now we're at twenty thirty two.
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Speaker 3: Kept getting worse.
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Speaker 5: Yeah, quote from Senator Mark Warner, it's been disappointing that
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Speaker 5: we have kicked this can this long. That's from you know,
14:39
Speaker 5: one of the senators who co sponsored the Social Security
14:42
Speaker 5: Fairness Act, which worsened, not bettered, the situation for the
14:45
Speaker 5: Social Security Trust Fund plenty to blame to go around there.
14:49
Speaker 5: By the way, that was very heavily supported bipartisan vote.
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Speaker 5: I think seventy plus votes for a YA on that one.
14:56
Speaker 5: But yeah, it is a looming issue, and this will
14:59
Speaker 5: be the first group of elected senators that will actually
15:04
Speaker 5: need to address it during their during their tenure. Trying
15:07
Speaker 5: to see and my guest, by the way, is it's
15:10
Speaker 5: tackled in you know, forty five days prior to the
15:14
Speaker 5: actual runout of money. Trying to see what the Social
15:19
Speaker 5: Security Fairness Act actually passed by. Yeah, I was three
15:22
Speaker 5: twenty seven to seventy five in the House in seventy
15:24
Speaker 5: six twenty in the Senate yeap.
15:27
Speaker 2: Again and again.
15:28
Speaker 5: We can talk about the fairness of it and why
15:31
Speaker 5: that should have been done, but the clear mathematical result
15:36
Speaker 5: was that the trust fund will you know, run out
15:38
Speaker 5: of money a little bit sooner than it otherwise would
15:40
Speaker 5: have because all you did was increased benefits for a
15:43
Speaker 5: group of beneficiaries.
15:44
Speaker 2: Which interestingly, the reason why the Social Security Act had
15:49
Speaker 2: the stuff that they removed in it was in order
15:51
Speaker 2: to try to make it more sustainable back in nineteen
15:54
Speaker 2: eighty three. So look, this is why we're screwed. Okay,
16:04
Speaker 2: here's the thing, Like, you can't just have all the
16:11
Speaker 2: fun stuff, and all we want to do is have
16:17
Speaker 2: the fun stuff. And I don't blame anyone who's you know,
16:22
Speaker 2: getting more money because of this, now, Like that's it's
16:25
Speaker 2: not your fault. This is all of our faults. Like
16:30
Speaker 2: we've all kind of screwed up on this because.
16:35
Speaker 5: We consistently we elect people who over promise us things.
16:39
Speaker 2: It's not even that I don't think they do over
16:41
Speaker 2: promise us things. I don't think like anyone really believes
16:45
Speaker 2: that anyone elected to Congress is going to do anything
16:47
Speaker 2: at this point, you know, Like I don't think there's
16:51
Speaker 2: high expectations there. I think the problem is that we're
16:58
Speaker 2: just unwilling to deal with anything getting worse in the
17:04
Speaker 2: short term in order to make it better in the
17:06
Speaker 2: long term. Right now, and we're just really impatient to
17:09
Speaker 2: the point where it's like if we feel the slightest
17:13
Speaker 2: bit uncomfortable for a couple of months, we lose our minds.
17:20
Speaker 5: Yeah, the famous quote ask not what my country can
17:25
Speaker 5: do for me, but what I can do for my care.
17:27
Speaker 3: It seems almost unread.
17:28
Speaker 2: I thought you were gonna go Churchill on me.
17:29
Speaker 3: Yeah, it seems almost unrecognizable.
17:31
Speaker 2: And Churchill was you can always count on Americans to
17:34
Speaker 2: do the right thing after all other options have been exhausted. Like,
17:40
Speaker 2: it's kind of where we are politically, Like we're just
17:42
Speaker 2: like social Security is going to run out of money
17:47
Speaker 2: in six years and benefits will have to be reduced
17:49
Speaker 2: unless we change course. And no one's talking about it
17:53
Speaker 2: for midterm elections. Correct, no one's talking about it. Have
17:59
Speaker 2: you heard the word social security once? Aside from no
18:02
Speaker 2: tax on social Security? No.
18:05
Speaker 5: To be fair, I do my very best to not
18:07
Speaker 5: pay attention to political ads. Well I don't either, but
18:09
Speaker 5: I don't hear it anywhere. But Mike, think about like
18:12
Speaker 5: what we.
18:12
Speaker 2: Read like, not even from a political sense, think about
18:14
Speaker 2: it just from the the problems that we hear about. Economically,
18:18
Speaker 2: we hear about affordability, which is, you know, a real problem.
18:20
Speaker 2: We hear about k shaped economy. We hear about a
18:23
Speaker 2: slowing job market, and we hear about a sluggish housing market.
18:27
Speaker 2: Those are like the bad things. The good things that
18:29
Speaker 2: we hear about are you know, AI is booming and
18:36
Speaker 2: he is booming. But does anyone look at Social Security
18:40
Speaker 2: be like, hey, guys, in six years, we're gonna have
18:42
Speaker 2: a real problem here. No, Like, this is the first
18:45
Speaker 2: time we've talked about this, chuck in politics. Six years
18:50
Speaker 2: may as well be a century. The problem is that
18:53
Speaker 2: it's just it's I recognize it's not Mike. If if
18:57
Speaker 2: if we had fixed this when I was born, it
18:59
Speaker 2: would have been so easy. It would have been like,
19:01
Speaker 2: raise Social Security taxes by a tenth of a percent,
19:04
Speaker 2: And now it's gonna be like, donate a vegetable farm
19:08
Speaker 2: each in order to figure out how to make the
19:12
Speaker 2: program solvent.
19:14
Speaker 3: Nope, just blow out the deficit, that's what they'll do.
19:17
Speaker 2: Even more, it's just a little discouraging to me as
19:20
Speaker 2: someone who would like to see a little bit of
19:22
Speaker 2: fiscal responsibility. The fact that you have senators who voted
19:27
Speaker 2: to worsen this saying oh, this could be a problem,
19:29
Speaker 2: really disappointing. It could be quick break here and uh
19:34
Speaker 2: Wall Street watching the Trip Answer.
19:35
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20:00
Speaker 6: Also Choppy training to begin twenty twenty six after an
20:03
Speaker 6: early rally was a race, leading to a mixed and
20:06
Speaker 6: mostly flat market.
20:07
Speaker 4: At the moment, UH.
20:09
Speaker 6: The Dow is up three tenths of one percent, or
20:13
Speaker 6: one hundred and fifty one points. SMP five hundred is
20:16
Speaker 6: edging four points higher, Nasdaq dipping by nine points. It
20:20
Speaker 6: was up over one percent in early trading. Russell two
20:23
Speaker 6: thousand is up over half a percent. Ten Your Treasure
20:26
Speaker 6: realed up three basis points at four point one eighty
20:29
Speaker 6: three percent, and crude oil down about one percent lower
20:33
Speaker 6: trading fifty six dollars and seventy six cents a barrel.
20:37
Speaker 6: Tesla down over one percent after the ev maker reported
20:40
Speaker 6: just over four hundred and eighteen thousand vehicle deliveries in
20:43
Speaker 6: the fourth quarter, down sixteen percent from a year ago.
20:47
Speaker 6: Well Street analysts were expecting about four hundred and twenty
20:50
Speaker 6: six thousand deliveries. Sticking with auto where Chinese carmaker BYD
20:55
Speaker 6: saw its sales growth slow significantly in twenty twenty five,
20:59
Speaker 6: but is still to top Tesla as the world's biggest
21:02
Speaker 6: ev maker. BID stock climbed over three percent on that news. Meanwhile,
21:08
Speaker 6: several furniture stocks are garnering attention after prisident Trump delayed
21:12
Speaker 6: a thirty percent Terrified on upholstered furniture, Kitchen Cabinets and
21:16
Speaker 6: Vanity's Wayfair and Williams Sonoma are now up over five percent,
21:20
Speaker 6: while RIH shares are now rallying ten percent. War By
21:24
Speaker 6: Parker stock is up three percent after Loop Capital named
21:27
Speaker 6: the eyeglasses maker one of its top picks for twenty
21:31
Speaker 6: twenty six, citing the firms expanding Ebita margins. I'm Tucker Silva,
21:36
Speaker 6: and that is Wall Street Watching. In the previous segment,
21:38
Speaker 6: we asked you the trivia question, where does Warren Buffett
21:41
Speaker 6: get his breakfast from work?
21:43
Speaker 2: Every day.
21:44
Speaker 6: That would be McDonald's. Mike from Barnstable, mass is our
21:48
Speaker 6: winner today taking them a Financial Exchange Show t shirt.
21:51
Speaker 6: Congrats to Mike and we play trivia every day here
21:53
Speaker 6: in the Financial Exchange See complete contest rules at Financial
21:57
Speaker 6: Exchange Show dot com.
21:58
Speaker 5: It's a new year, which means a brand new guide
22:01
Speaker 5: from the Armstrong Advisory Group. And when we were thinking
22:04
Speaker 5: about guides to create for this for this month, we
22:06
Speaker 5: really were asking ourselves, like, what are some of the
22:08
Speaker 5: most common questions that we get from listeners, clients, et cetera.
22:14
Speaker 3: And by far one of the most common ones has.
22:16
Speaker 5: To do with Social Security and Medicare, And so we
22:19
Speaker 5: put together a brand new guide for January how to
22:21
Speaker 5: apply for Social Security and Medicare. It doesn't only go
22:25
Speaker 5: through you know what required documents you're going to need,
22:28
Speaker 5: like you know your previous marriage history, work history, which
22:32
Speaker 5: you do need, but it also gives you some context
22:34
Speaker 5: for when should you apply. What are the different returns
22:39
Speaker 5: that you will see on your Social Security benefit by
22:41
Speaker 5: delaying those overall benefits?
22:43
Speaker 2: What do you actually have to do to apply?
22:45
Speaker 3: Yeah, like what is needed to file your application?
22:48
Speaker 5: What are the tax consequences of receiving Social Security income
22:51
Speaker 5: depending on where you live, and same goes from medicare.
22:54
Speaker 5: What exactly does this stuff cover? What is the difference ABCD?
22:59
Speaker 5: How does all of this stuff work for a lot
23:02
Speaker 5: of folks that are you know already there you've been
23:06
Speaker 5: through this. For anyone under the age of sixty five,
23:09
Speaker 5: you're likely getting your first introduction to it just as
23:13
Speaker 5: you get closer to that date. If you want to
23:15
Speaker 5: feel prepared in the new year and get ready for
23:19
Speaker 5: that next stage of life, please call the Armstrong Advisor
23:21
Speaker 5: Group and request your free copy of how to Apply
23:24
Speaker 5: for Social Security and Medicacre. Again it's our free guide
23:27
Speaker 5: for January how to Apply for Social Security and Medicare.
23:30
Speaker 5: You can get it by calling us at eight hundred
23:32
Speaker 5: three nine three for zero zero one. You can also
23:35
Speaker 5: request it online at Armstrong Advisory dot com, but that
23:39
Speaker 5: phone number once again for our free guide on Social
23:41
Speaker 5: Security and Medicare is eight hundred three nine three for
23:44
Speaker 5: zero zero one.
23:45
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
23:48
Speaker 1: registered investment advisor. Nothing in the ad or in any
23:50
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
23:54
Speaker 1: your own financial tax into state planning advisors before making
23:56
Speaker 1: any investment decisions, Armstrong make contact you to offer investment
23:59
Speaker 1: advice services.
24:02
Speaker 2: We want to talk a little bit about Warren Buffett.
24:04
Speaker 3: So as five years old and retired yesterday two days ago.
24:08
Speaker 2: Two days ago. So as of today, you know, Warren
24:10
Speaker 2: Buffett is officially retired. And I want to dig in
24:16
Speaker 2: on this quote that he had because he's going to
24:18
Speaker 2: be doing He recorded a series of interviews with Becky
24:22
Speaker 2: Quick from CNBC Sure and this quote I think is interesting.
24:27
Speaker 2: He says, I think Berkshire Hathaway has a better chance
24:32
Speaker 2: of being here one hundred years from now than any
24:35
Speaker 2: company I can think of. So the question that I
24:39
Speaker 2: would love to ask Buffett, and again like I don't
24:42
Speaker 2: think the full interview is available right now.
24:44
Speaker 3: Who else is on the list?
24:45
Speaker 2: Well, I have a few questions I'd like to ask.
24:48
Speaker 2: The first is what do you think the chance is
24:51
Speaker 2: that Berkshire Hathaway is here one hundred Because he's not
24:56
Speaker 2: saying I'm one hundred percent sure will be.
24:58
Speaker 3: There, saying it's got the best chance of all the
25:00
Speaker 3: ones that are like.
25:01
Speaker 2: Does he think it's a seventy percent chance? Does he
25:03
Speaker 2: think it's a twenty percent chance. I don't know. The
25:06
Speaker 2: next one is who do you think is your closest
25:11
Speaker 2: competition in that respect, not in terms of you know
25:13
Speaker 2: your competitors in business, but who do you think has
25:18
Speaker 2: you know, the right mix to be able to say, yeah,
25:22
Speaker 2: we think we've got a good chance of being here
25:24
Speaker 2: one hundred years from now. And the other piece on
25:29
Speaker 2: this that I think is interesting is when we look
25:37
Speaker 2: at companies that have been dominated by one individual historically,
25:44
Speaker 2: there's not really the best track record of what happens
25:48
Speaker 2: when they're gone. There's a handful that I think you
25:51
Speaker 2: can point to and you're like, yep, they've been able
25:54
Speaker 2: to do well. Apple's one of them for the last
25:56
Speaker 2: you know, fourteen years, now, fifteen years, it'll be this fall.
26:00
Speaker 2: But you know, you think about some of these other ones,
26:03
Speaker 2: and you know ge Post, Jack Welch and frankly.
26:06
Speaker 3: That environment any of them you can think of.
26:09
Speaker 5: I don't know the tenure of any of those CEOs
26:12
Speaker 5: off the top of my head, but they have to
26:13
Speaker 5: be less than half of what the period of time
26:17
Speaker 5: that Buffet's headed Berkshire Hathway.
26:20
Speaker 2: Now, the question on this Buffett historically and again this
26:25
Speaker 2: is all anecdotal. So like I, I've never talked to
26:29
Speaker 2: Warren Buffett. I've never worked at any of his businesses.
26:32
Speaker 2: You know, I bought a couch and some furniture from
26:34
Speaker 2: Jordan's Furniture once, but that's as close as I've ever
26:36
Speaker 2: gotten to Warren Buffett.
26:37
Speaker 3: Yeah, I got an ice cream from DQ, so we're
26:39
Speaker 3: basically the best bud there.
26:40
Speaker 2: You go, you spilled it on my couch and they
26:43
Speaker 2: don't own a cleaning service, so we couldn't help. But
26:47
Speaker 2: I think that when you look at the way they've
26:50
Speaker 2: built the company, my understanding is that Buffett has generally said,
26:55
Speaker 2: I don't want us to be involved in running all
26:58
Speaker 2: of these separate businesses, since he lets them kind of
27:02
Speaker 2: run themselves, and so in theory, maybe that is what
27:06
Speaker 2: makes it so that he believes that him leaving isn't
27:09
Speaker 2: as important, is because these businesses have run themselves and
27:13
Speaker 2: all they did was invest in them.
27:15
Speaker 1: Right.
27:15
Speaker 2: But I just one hundred years is an eternity for
27:21
Speaker 2: a business. I mean ten years is a long time
27:24
Speaker 2: for a business. One hundred years yeah, I mean one
27:29
Speaker 2: hundred years barely been invented, what had barely been band aids.
27:34
Speaker 2: They've invented in nineteen twenty. So I don't know. I
27:41
Speaker 2: wonder what what Buffett would handicap as the likelihood that
27:46
Speaker 2: Berkshire's around one hundred years might be it might be
27:48
Speaker 2: one in ten. My guess is he would say like
27:50
Speaker 2: twenty to twenty five percent.
27:52
Speaker 3: Yeah, I'll give it to him.
27:54
Speaker 5: Like if diversification is the winning attribute there, then yeah,
28:00
Speaker 5: few companies have it better than that.
28:03
Speaker 3: One.
28:04
Speaker 2: To take a quick break. When we come back, we're
28:06
Speaker 2: going to be joined by Paul Lamonica from Barons right
28:09
Speaker 2: after this.
28:10
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28:47
Speaker 1: Ladies and Gentlemen.
28:49
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29:24
Speaker 2: As promised. We're joined now by Paul Lamonica from Barons
29:29
Speaker 2: here to chat with us on the first Friday of
29:32
Speaker 2: twenty twenty six. Paul, how you doing today.
29:35
Speaker 7: I'm good. Thanks, Happy new year everyone.
29:37
Speaker 2: And same to you. We're talking today about the dogs
29:41
Speaker 2: of the Doo. What are the dogs of the dow? Paul, Yeah.
29:46
Speaker 7: The dogs in the Dow are the companies in the
29:50
Speaker 7: Dow thirty that had the highest dividend yields the previous year.
29:56
Speaker 7: So the top ten income producing, high yielding stocks, and
30:02
Speaker 7: you know, there's this notion that if you buy them,
30:06
Speaker 7: that that group could outperform the market in the coming year.
30:11
Speaker 7: It's had a mixed track record in the past few years,
30:14
Speaker 7: but you know, the Dow dogs did outperform the broader
30:19
Speaker 7: market in twenty twenty five, and it's going to be
30:22
Speaker 7: interesting to see what happens this year because seven of
30:25
Speaker 7: the ten companies that were Dogs of the Dow in
30:29
Speaker 7: twenty twenty five are once again still high yielding enough
30:33
Speaker 7: to be Dogs of the Dow this year. There are
30:36
Speaker 7: three stocks, you know, Cisco, IBM, and McDonald's that are
30:41
Speaker 7: leaving this group, and they're being replaced by three that
30:44
Speaker 7: were under performers last year that maybe could turn around
30:47
Speaker 7: Home Depot, you know, if the housing market bounces back
30:50
Speaker 7: with interest rates coming down. United Health, you know, we
30:53
Speaker 7: all know about their high profile problems, you know, and
30:57
Speaker 7: then also Nike, which you know, I think is bit
31:00
Speaker 7: of a turnaround story, hopes that their Newish CEO can
31:04
Speaker 7: bring back you know, the former glory for that athletic
31:07
Speaker 7: apparel giant. Paul.
31:08
Speaker 2: What's that like? The historical relevance and development of this
31:12
Speaker 2: Dogs of the Dow strategy, like, can you tell our
31:14
Speaker 2: listeners just a little bit about like what you know,
31:17
Speaker 2: why this matters or does this matter historically?
31:20
Speaker 7: Yeah, historically, you know, the Dogs of the Dow have
31:24
Speaker 7: done reasonably well, you know. And the premise is that
31:28
Speaker 7: you are buying companies that are obviously already blue chips.
31:32
Speaker 7: They're among the thirty of you know, exclusive members of
31:37
Speaker 7: the Dow Jones Industrial Average. But in addition to that,
31:40
Speaker 7: you also have the income that you get from the
31:45
Speaker 7: high dividend yields that these companies offer. So even if
31:49
Speaker 7: you're getting a little bit of appreciation from earnings growth,
31:53
Speaker 7: you can also get some pretty spectacular dividend you know,
31:57
Speaker 7: kickers as well. You look at the top two two
32:00
Speaker 7: stocks in the Dogs of the Dow, for Verizon with
32:04
Speaker 7: a yield you know, well over six percent and Chevron
32:08
Speaker 7: you know, as a yield I think north of four
32:11
Speaker 7: percent as well. So you take that if you just
32:15
Speaker 7: get a little bit of appreciation from steady earnings growth,
32:18
Speaker 7: and you you could be looking at you know, double
32:20
Speaker 7: digit appreciation for those two stocks in particular, how high
32:24
Speaker 7: their dividend yields are. The rest of the Dogs of
32:26
Speaker 7: the Dow the yields aren't that high. They range around
32:30
Speaker 7: two and a half to three percent, which is still,
32:32
Speaker 7: you know, pretty solid, especially if you think bond yields
32:36
Speaker 7: are going to fall further as the Fed cuts rates.
32:39
Speaker 2: Paul, you mentioned that in recent years these strategy has
32:43
Speaker 2: had mixed results. Can you give some examples and talk
32:46
Speaker 2: about why that might have been the case?
32:49
Speaker 7: Yeah, I think that in some respects, the companies in
32:54
Speaker 7: the Magnificent seven that have been darlings of the market,
32:59
Speaker 7: a lot of them do pay dividends, and some of
33:01
Speaker 7: them are in the down now in Video, Microsoft, Apple,
33:05
Speaker 7: obviously Amazon, but you know, Amazon not paying a dividend yet.
33:10
Speaker 7: But the other three do pay dividends. They're dividends while
33:14
Speaker 7: steady and solid and are growing, they're not as high
33:19
Speaker 7: as what you'll get from say, Merk, Jay and Jay
33:23
Speaker 7: some of the healthcare names of you know, an addition
33:26
Speaker 7: to Verizon and Chevron in the Dow. So, you know,
33:30
Speaker 7: I think investors who have been really enamored with the
33:33
Speaker 7: AI trade and these earnings momentum plays, they don't particularly
33:38
Speaker 7: care as much about the dividends. It's nice that, you know,
33:40
Speaker 7: a company like Nvidia pays a small dividend, but no
33:43
Speaker 7: one in there is really buying in video as an
33:46
Speaker 7: income play the way they are with Verizon and some
33:49
Speaker 7: of these stodgier Dow Dog stocks.
33:52
Speaker 2: Very good, Paul, appreciate you joining us. So you have
33:55
Speaker 2: a great start to twenty twenty six and we're looking
33:59
Speaker 2: forward to chatting with you over the course of the year.
34:02
Speaker 7: Thank you very much. Guys, look forward to doing this
34:04
Speaker 7: again next Friday.
34:05
Speaker 2: That is Paul Monica from Barons talking about the dogs
34:09
Speaker 2: of the Dow Sure was over to you, Michael, What
34:13
Speaker 2: do you have for me?
34:14
Speaker 5: Wall Street Journal reports that parents are going broke from
34:16
Speaker 5: their kids sushi obsession.
34:19
Speaker 3: Can confirm, can confirm? I will? It surprises me.
34:24
Speaker 5: I don't think I had sushi as a kid until
34:28
Speaker 5: I don't know, maybe maybe I was like eighteen or
34:31
Speaker 5: high school. College wasn't readily available in most towns today.
34:36
Speaker 5: Most certainly is I can attest that if you go
34:40
Speaker 5: to any grocery store today everywhere, I can attest that
34:45
Speaker 5: if I ever asked my kids what they want to
34:47
Speaker 5: do for dinner, because we're doing takeout on the time,
34:50
Speaker 5: the answer is sushi.
34:52
Speaker 3: Interesting one undred percent of the time, the answer is sushi.
34:54
Speaker 4: So they're opting for what what like Tuna's.
34:57
Speaker 5: Samon, avocado roll and California roll. Those are their orders.
35:02
Speaker 5: They will then pick at all the stuff that I
35:04
Speaker 5: order for myself, but they one hundred percent that is
35:06
Speaker 5: what they order, and it is expensive, but you know what,
35:11
Speaker 5: it's also a lot healthier than the other things that
35:15
Speaker 5: they would like to eat, like a you know, a
35:18
Speaker 5: chicken patty sandwich or pizza, and so.
35:21
Speaker 2: Wrong with the chicken patty sandwich or pizza.
35:23
Speaker 5: Again, wrong with either of them, but you know, compared
35:28
Speaker 5: to sushi, I would consider them to be a little
35:29
Speaker 5: bit less healthy. And so yeah, I guess I'm willing
35:32
Speaker 5: to pay the price within reason. We try not to
35:35
Speaker 5: do it more than like once every other week, but yeah,
35:37
Speaker 5: it is it is a change, what I mean because
35:40
Speaker 5: of this, I'm expecting I already see a lot more
35:42
Speaker 5: sushi restaurants. But what's probably coming is like faster food
35:47
Speaker 5: sushi change would be my guest.
35:49
Speaker 2: Oh yeah, how's that gonna end badly?
35:51
Speaker 5: That's that's like the chipotles of sushi I think are
35:53
Speaker 5: coming for twenty twenty six.
35:55
Speaker 6: Let me get your thoughts on this, Mike. There's an
35:58
Speaker 6: establishment by me very nice establishment. On Sundays they offer
36:02
Speaker 6: half off sushi. Thoughts, there's a reason it's half off.
36:07
Speaker 6: What happened to the half of what happened to the
36:09
Speaker 6: half on? Yeah, because they get a new shipment on
36:13
Speaker 6: I know, Monday or Tuesday. I've done it three times
36:18
Speaker 6: and I was fine.
36:18
Speaker 5: Yeah, I'll mainly stick to the California and Philadelphia roles,
36:21
Speaker 5: but yeah, I'll go for it.
36:23
Speaker 4: Okay, Yeah, just curious.
36:25
Speaker 5: Yeah, good question. So I mean you go to Japan
36:27
Speaker 5: like you get sushi had a seven eleven. Yeah, I
36:30
Speaker 5: think that's more what's coming for the United States.
36:32
Speaker 2: I gotta be honest, Like, I have eaten a decent
36:33
Speaker 2: amount of sushi in my life, have never had a
36:36
Speaker 2: problem from it, No, I haven't. On the other hand,
36:40
Speaker 2: I've eaten a decent amount of oysters in my life.
36:43
Speaker 2: Have had several problems from the euro problems from oysters,
36:46
Speaker 2: have had several problems with them, one to the point
36:48
Speaker 2: at a wedding where I was so violently I had
36:51
Speaker 2: to leave the wedding, thankfully not my own. That was quick. Yeah,
36:55
Speaker 2: it was not good.
36:57
Speaker 5: The article describes these kids saying they are like savages
37:01
Speaker 5: and also can confirm The quantity of sushi they eat
37:05
Speaker 5: in such a short period of time is stunning. And
37:08
Speaker 5: these kids are My kids are seven and nine years old.
37:13
Speaker 5: Yeah so yeah, I mean, look, it's they're savages in
37:16
Speaker 5: every other way too, those of that part's not right here.
37:18
Speaker 2: Here's the problem is you take a kid being able
37:20
Speaker 2: to eat a pint of blueberries in a sitting, and
37:23
Speaker 2: now you picture a pint of sushi and you're like, yep,
37:27
Speaker 2: they can do that. Yeah, so I understand that. I
37:31
Speaker 2: don't know. We're still big, you know, pizza fans in
37:34
Speaker 2: our house.
37:35
Speaker 3: We had pizza last night, but if I asked my
37:37
Speaker 3: kids what they want, it's sushi.
37:40
Speaker 2: Interesting. Interesting. We mine are younger. We haven't quite gotten
37:43
Speaker 2: there yet. You know. My two year old would look
37:45
Speaker 2: up and be like, oh fishy ha ha, Like you know, yeah,
37:48
Speaker 2: but uh yeah, we're not quite there yet. And I
37:52
Speaker 2: guess we'll wait. I don't think you're supposed to feed
37:55
Speaker 2: a two.
37:55
Speaker 5: Year old raw fish, not three times a day. That'll
37:58
Speaker 5: give you mercury poisoning.
38:00
Speaker 2: Oh yeah, got it.
38:01
Speaker 3: Gotta be careful, that.
38:02
Speaker 2: Got it. Let's take a quick break for uh, it's
38:05
Speaker 2: actually the weekend. It keeps feeling like a Monday, but
38:07
Speaker 2: it's Friday, so we're gonna take a weekend.
38:09
Speaker 3: Everybody.
38:10
Speaker 2: Yeah, we'll take a break for the weekend. We'll see
38:11
Speaker 2: you on Monday.
38:12
Speaker 4: Happy New Year. It see the only time you can
38:14
Speaker 4: head that too.
38:15
Speaker 3: I'll be saying it for the next three weeks to
38:17
Speaker 3: anger Tucker