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What spooked the S&P 500? · The Financial Exchange Show

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Speaker 1: a donation today. This is the Financial Exchange with Chuck
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Speaker 1: Zada and Mike Armstrong.
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Speaker 2: Kicking off hour two of the Financial Exchange is Chuck,
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Speaker 2: Mike and Tucker and stocks with again kind of a
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Speaker 2: modest sell off today, nothing big, nothing crazy. The dows
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Speaker 2: off a couple hundred points, about half a percent. The
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Speaker 2: S and P five hundred is off twenty five points,
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Speaker 2: are about half a percent. The nas necks down fifty
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Speaker 2: four points are about a third of a percent. So
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Speaker 2: just not much movement on that side of things. Tenure
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Speaker 2: Treasury is down four tenths of a basis point. Big
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Speaker 2: move really teeny move to four point two three seven percent. Uh,
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Speaker 2: and so just not too much going on.
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Speaker 3: Again.
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Speaker 2: He had kind of a sharper sell off to start
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Speaker 2: the day, but it's moderated as the day has gone on.
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Speaker 4: Yeah, we were off what a full percentage point on
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Speaker 4: the S and P five hundred at the open, I believe,
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Speaker 4: so it has moderated a fair bit as some hope
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Speaker 4: to rally into the weekend.
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Speaker 2: Perhaps you got oil up eighteen cents a barrel to
2:07
Speaker 2: sixty eight twenty five on West Texas Intermediate Nationally where
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Speaker 2: continuing to see gas prices moving up as we move
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Speaker 2: over to the summer blend of gasoline now at three
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Speaker 2: twelve and nine tenths of a cent nationally, the price
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Speaker 2: of gold is down twenty three dollars and ten cents
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Speaker 2: nouns to threeenty twenty dollars and seventy cents, and so overall,
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Speaker 2: nothing too exciting at this point, but it's a Friday,
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Speaker 2: and all kinds of things can change. Especially, Hey, we
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Speaker 2: got March madness going on, and does the madness spill
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Speaker 2: over to the markets.
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Speaker 3: Maybe it's market madness.
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Speaker 4: That's probably why markets are so boring today. Right, all
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Speaker 4: of the gamblers, all of the games mail traders who
2:49
Speaker 4: typically spend all time day day trading, are instead spending
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Speaker 4: their day gambling.
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Speaker 3: Tip off in one hour. Who's the first game today?
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Speaker 5: Oh?
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Speaker 3: I forget, I don't know.
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Speaker 2: I gotta say, first day of the tournament this year
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Speaker 2: underwhelm kind of mah. Yeah, they were like one and
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Speaker 2: a half good games there, Baylor.
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Speaker 6: In Mississippi at twelve fifteen.
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Speaker 2: Oh okay, fine, you know, not bad? Okay, eight nine
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Speaker 2: seats acceptable? Yeah, first day of the tournament this year
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Speaker 2: nothing great. I mean you had a couple of games
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Speaker 2: that were okay ish, you know that Missouri Drake game
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Speaker 2: was fine the end of the Clemson loss.
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Speaker 3: To whoever it was McNeice.
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Speaker 2: McNeice, Yeah, I guess I watched the first half of
3:33
Speaker 2: that game where Clemson scored thirteen points in the entire half.
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Speaker 6: Yeah, not great, And I'm sitting there going.
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Speaker 3: What happened here?
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Speaker 2: And then they scored forty nine in the second half,
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Speaker 2: or it might have been forty nine with like a
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Speaker 2: minute to play, even but yeah, just not a great
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Speaker 2: game overall. But it's neither here nor there. We're here
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Speaker 2: to talk about what spooked the S and P five
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Speaker 2: hundred and why it wasn't the trade war, because that's
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Speaker 2: the title of the piece from Bloomberg Opinion, and it
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Speaker 2: makes the point that, look, if this was really you know,
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Speaker 2: trade related, you'd be seeing things like, you know, automakers
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Speaker 2: and consumer discretionary companies getting hit harder, and instead you
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Speaker 2: saw big tech really struggling the most. And I always
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Speaker 2: get nervous when we try to, like after the fact,
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Speaker 2: assign blame is to, well, here's what really happened, And
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Speaker 2: most of the time you don't really know, like it's here,
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Speaker 2: it's not even you don't really know the idea that, hey,
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Speaker 2: the trade war would only, not only, but predominantly affect
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Speaker 2: you know, consumer stocks. It's it's missing the fact that
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Speaker 2: trading is not just about what's going on in the world,
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Speaker 2: but it's about how investors are positioned beforehand. And so
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Speaker 2: if they're positioned heavily in all the mag seven stuff
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Speaker 2: and this and that, yeah, the trade war could still
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Speaker 2: be the proximate cause for the selloff, even if it's
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Speaker 2: not selling off the stocks you think are supposed.
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Speaker 4: To Ye, So an example here, I can think of
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Speaker 4: companies that would be more susceptible to the current talk
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Speaker 4: of trade war than general motors. Fair to say, yes,
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Speaker 4: stock's only down three percent this year. Yeah, so I
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Speaker 4: get what Near? Is the point that Near is making here?
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Speaker 4: The counterpoint that I would make is how do most
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Speaker 4: people invest these days, Chuck, in terms of tools that
5:21
Speaker 4: they use within their investment portfolios. Say that again, the
5:26
Speaker 4: tools that people use their investment portfolios, my argument would
5:29
Speaker 4: be mainly mutual funds and exchange traded funds. I think
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Speaker 4: that's how predominantly a lot of people are investing these days.
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Speaker 3: I thought you were going in a different place with this,
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Speaker 3: got it.
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Speaker 4: So the point that I think I would make is
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Speaker 4: that when people get spooked about a trade war or
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Speaker 4: a recession or a cut to jobs or whatever might
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Speaker 4: play out. I don't think they're thinking it through so
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Speaker 4: logically to sell, Oh, say, well, I'd better go look
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Speaker 4: at my General Motors stock, or my auto maker or
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Speaker 4: my consumer discretionary brand stock. I think generally they're saying, hmm,
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Speaker 4: what's my biggest holding, what's done the best over the
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Speaker 4: last few years.
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Speaker 5: Let me go dump some of that in order to
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Speaker 5: insulate myself a bit.
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Speaker 2: Maybe yes, maybe, Like the other way is, oh, no,
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Speaker 2: this has done well, I'm not going to sell it.
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Speaker 2: So like you could come up with all these justifications
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Speaker 2: for whatever. Oh, Ultimately, sometimes you have to just look
6:23
Speaker 2: at the random number generator and be like, this is
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Speaker 2: what it did today. And I don't know why. I
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Speaker 2: it bothers me that we have to have so much
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Speaker 2: certainty in today's world. I feel like people were more
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Speaker 2: embarrassed now than before to say that they don't know
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Speaker 2: why something happened.
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Speaker 3: And I don't know if it's because we have like.
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Speaker 2: Phones in our hand all the time, and so we
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Speaker 2: think that we should have access to all the information.
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Speaker 4: And I don't think that's by the way, markets and
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Speaker 4: economic story goes across social politics, across media, like everywhere.
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Speaker 4: The idea has to be that I know everything, and.
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Speaker 2: And like sometimes you can just look at the market
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Speaker 2: and be like, I have no idea why it did
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Speaker 2: what it did.
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Speaker 4: I'm only like ninety nine percent sure that I'm not
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Speaker 4: living in the Truman Show right now.
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Speaker 5: Well, what does that make me then? Paid actor?
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Speaker 4: So yeah, that's I think we could all use a
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Speaker 4: higher dose of skepticism when it comes to our own
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Speaker 4: knowledge about the world. Sometimes you just don't know what's
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Speaker 4: going to happen next, and that's okay.
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Speaker 2: Yeah, it's like we're kind of in a little bit
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Speaker 2: of an uncertain place, and in terms of you know
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Speaker 2: where this market and economy is going to go, there's
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Speaker 2: a lot of uncertainty about what policies you may or
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Speaker 2: may not see implemented in the next couple of weeks
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Speaker 2: as it relates to trade and how that could affect
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Speaker 2: all of this. And so I don't know, Like it's
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Speaker 2: okay to be like, yeah, we're just gonna have to
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Speaker 2: see what happens.
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Speaker 4: We also shouldn't minimize that because while it is true
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Speaker 4: that there's always uncertainty, right I mean, that's kind of
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Speaker 4: the premise of this program is that, hey, you know,
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Speaker 4: these are all the things that are out there that
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Speaker 4: we're not sure about and what's going to happen next.
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Speaker 4: I think it is fair to qualify this period of
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Speaker 4: time as dealing with a lot more uncertainty than is typical.
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Speaker 4: Usually we have a better sense of what trade policy
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Speaker 4: is going to look like with our closest allies. Usually
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Speaker 4: we have a better sense of what tax rates might
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Speaker 4: look like over the next couple of years, and what
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Speaker 4: employment and spending at the government level is going to
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Speaker 4: look like. So I'll say domestically, I think we're facing
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Speaker 4: a higher degree of uncertainty, and you're seeing that echoed
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Speaker 4: by most surveys that are out there, and that's important
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Speaker 4: to acknowledge and could be contributing to this market selloff.
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Speaker 4: But again, we always face some degree of uncertainty when
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Speaker 4: it comes to what happens next.
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Speaker 3: Take a quick break here when we come back. We
8:44
Speaker 3: had a little bit of trivia right after this.
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Speaker 6: All right, Still a little trivia here on the Financial
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Speaker 6: Exchange And on this day, several years ago, Twitter founder
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Speaker 6: Jack Dorsey, excuse me sent out the first ever tweet.
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Speaker 6: Dorsey was at the helm of Twitter during its early stages,
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Speaker 6: what year was Twitter launched? Once again? What year was
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10:25
Speaker 2: Okay, I just came across this and we need to
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Speaker 2: cover this story here because you know, every now and
10:33
Speaker 2: then you see something and you're like, this is bad.
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Speaker 3: This is bad. UH.
10:39
Speaker 2: So door Dash, the company that delivers food to your
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Speaker 2: house or wherever it is that you happen to be
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Speaker 2: uh has apparently as of yesterday, partnered with Karna, who
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Speaker 2: is a buy now, pay later service, a bumple if
10:53
Speaker 2: you will.
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Speaker 4: There's a lot of people that are probably not familiar
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Speaker 4: with buy now, pay later.
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Speaker 3: So, well, you buy now and then you pay later.
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Speaker 4: Yeah, I know it's right in the name, but it's
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Speaker 4: it's a it's a basically non tell me what that is.
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Speaker 5: But they don't check your credit what a breakfast diner is.
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Speaker 4: They don't check your credit and they do not report
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Speaker 4: to major credit agencies either. And it's typically used on
11:17
Speaker 4: you'll see a firm or a Klarno or many of
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Speaker 4: these agencies. If you're on like an Amazon or a Walmart,
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Speaker 4: you can buy over installment periods.
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Speaker 2: And and basically the way that they do a bunch
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Speaker 2: of like alternative underwriting using technology and this and that
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Speaker 2: that supposedly they're good at.
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Speaker 3: Who knows if they actually are.
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Speaker 2: And so they partnered yesterday to allow people to pay
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Speaker 2: for door dash food deliveries using interest free installment plans. Now,
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Speaker 2: I have a few different problems with this. The first
11:53
Speaker 2: is if you have to pay for takeout using an
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Speaker 2: installment plan, you shouldn't be ordering takeout. I think that
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Speaker 2: is safe to say, especially given like the fees associated
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Speaker 2: with DoorDash, like the as an example, if you wanted
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Speaker 2: an eight dollars meal from McDonald's, which is not outrageous
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Speaker 2: these days, like that's probably like middle of the road,
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Speaker 2: like a number one with you know, prize and a
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Speaker 2: large soda. Okay, you're probably in that range. It's probably
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Speaker 2: gonna cost you double to triple that on DoorDash. Now,
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Speaker 2: if you want something that's you know, more expensive, Let's
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Speaker 2: say you're ordering I don't know some what's a restaurant
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Speaker 2: that would be on DoorDash. If Applebee's, let's say they're
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Speaker 2: on DoorDash. Okay, you're you know, forty dollars meal for
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Speaker 2: the family is probably sixty five something in that range.
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Speaker 2: So if you have to do it on an installment plan,
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Speaker 2: either like go there and eat it, or like make
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Speaker 2: like say, if you're ordering fees on an installment plan,
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Speaker 2: it's a problem. Yeah, I'm sorry, it just is. But
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Speaker 2: here's the other piece that I'm trying to figure out.
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Speaker 2: So normally, Mike, when you hear like interest free financing,
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Speaker 2: what are the things that that's normally happening on.
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Speaker 4: Maybe a special promo for a vehicle that they want
13:12
Speaker 4: to offload, a couch. If I go to you know,
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Speaker 4: Jordan's Furniture, maybe I can get an interest free there
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Speaker 4: furniture set things like that.
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Speaker 2: There's some kind of collateral. It might not be the
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Speaker 2: most valuable, but hey, if you default on the loan, great,
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Speaker 2: they can take your FOURD escape. You might not like it,
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Speaker 2: but they can take it. What do they do after
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Speaker 2: you've digested the burrito from Chipotle that you ordered, Like, okay,
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Speaker 2: we've got a collateralized burrito obligation here. Well okay, Like,
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Speaker 2: so Karna, like, is lending you money for something that
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Speaker 2: no longer exists because you've eaten it.
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Speaker 5: Yeah, that's an end pretty rapidly depreciating asset pretty.
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Speaker 2: Quickly, within about forty eight hours, there's no value left.
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Speaker 2: And so I'm just trying to walk through the level
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Speaker 2: of underwriting you have to be comfortable doing, because if
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Speaker 2: I have to put my burrito on layaway. How in
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Speaker 2: the world can I be a good enough credit risk
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Speaker 2: for you to let me do this and you follow
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Speaker 2: on effects here?
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Speaker 4: Just you know, speaking to the general credit market. If
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Speaker 4: I'm a credit card issuer or a mortgage issuer, I
14:24
Speaker 4: would really, really really like to know if any of
14:29
Speaker 4: those who I'm considering an application from have borrowed money
14:33
Speaker 4: to order food in the last few years.
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Speaker 5: And I can't get that information right now.
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Speaker 2: And look, this is not like to pooh pooh the
14:42
Speaker 2: idea that like everyone has I'm not trying to say
14:45
Speaker 2: like everyone has enough money. There are plenty of families
14:47
Speaker 2: that are living hand to mouth right now and have
14:50
Speaker 2: to buy grosceries and stuff on credit.
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Speaker 3: Cards with you.
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Speaker 5: They they shouldn't be using door dash, Like.
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Speaker 2: When you talk about the overall cost too, said family,
15:00
Speaker 2: it is much higher borrowing money through like trying to
15:04
Speaker 2: do door dash than needing to buy groceries and so like.
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Speaker 2: There are so many different potential problems that I see
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Speaker 2: with this, the biggest one just being again, how how
15:19
Speaker 2: as an underwriter like you have someone who cannot pay
15:22
Speaker 2: for their DoorDash delivery all at once, and you say,
15:26
Speaker 2: I'm just going to lend you money at no interest,
15:32
Speaker 2: which also then raises one other interesting question, which is, Okay,
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Speaker 2: what they say, like there's no interest, what kind of money?
15:42
Speaker 2: What kind of cut is Karna taking from door dash
15:46
Speaker 2: because they they have to make money somewhere. This isn't
15:48
Speaker 2: just like a get it you don't do getting the
15:50
Speaker 2: door deals on Chipotle, Like that's that's just not how
15:55
Speaker 2: it works. So then it's like, so, how much is
15:59
Speaker 2: DoorDash raising their fees in order to pay for this
16:02
Speaker 2: zero interest loan? Because car again, I would not want
16:06
Speaker 2: to be in the business of giving away free money
16:08
Speaker 2: for burritos. No, that just doesn't seem like the best
16:13
Speaker 2: business model. So I've got a lot of questions on this,
16:17
Speaker 2: and I don't think I have any answers that point
16:19
Speaker 2: to this actually being a good thing for consumers.
16:25
Speaker 5: Agree, it's rare that.
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Speaker 3: You find something that I can just like universally be
16:28
Speaker 3: like this is bad.
16:30
Speaker 5: Yeah, bad and stupid. Yes, it's hard, And I don't
16:34
Speaker 5: really see who it's a good deal for.
16:37
Speaker 2: No, it's like all the parties you look at it,
16:40
Speaker 2: you're like, okay, no, here's what it's a good deal
16:42
Speaker 2: for the restaurant, And even there like they're still probably
16:46
Speaker 2: paying that they're still paying the door dash fees, so
16:48
Speaker 2: you can even be like, yeah, there's a problem there
16:50
Speaker 2: and that their margins are getting eaten away. But most
16:52
Speaker 2: of the restaurants on door dash now raise their prices
16:55
Speaker 2: by twenty to thirty percent to compensate for that anyways,
17:00
Speaker 2: so you can make a case that this is okay
17:01
Speaker 2: for the restaurant.
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Speaker 5: But man, food on layaway is just a crazy concept.
17:09
Speaker 2: Mike, I'm gonna put this burrito here for you. You're gonna
17:12
Speaker 2: be able to see it and smell it, and when
17:13
Speaker 2: you can finally pay for it, you can have it again.
17:16
Speaker 4: It's not quite lay away because you get the product
17:18
Speaker 4: right front. But this is the closest thing we have
17:20
Speaker 4: to you know, for those of you that used to
17:22
Speaker 4: put something on lay away, this is the closest.
17:26
Speaker 2: Here's the thing layaway made sense. Yeah, the premise of
17:30
Speaker 2: it was, yeah, I can't afford this. Now they're gonna
17:34
Speaker 2: put it in the stock room until I can actually
17:37
Speaker 2: afford to buy it, and then they're gonna give it
17:38
Speaker 2: to me. And if I can't afford to buy it, it
17:40
Speaker 2: goes back into the regular circulation, and that's it. Like layaway,
17:45
Speaker 2: made a ton of sense, right, This is the this
17:49
Speaker 2: is reverse layaway, this is this is I don't even
17:52
Speaker 2: know what you would call it.
17:53
Speaker 3: It's it's just throwing food at people and saying, pay
17:58
Speaker 3: me later for it.
18:01
Speaker 5: Yeah, that's a tremendously bad idea.
18:03
Speaker 4: It's kind of wild, the the you know, the stuff
18:07
Speaker 4: that I worry about. Again, there are only two tricks
18:11
Speaker 4: in the finance world. It's how can I leverage something?
18:14
Speaker 4: And how can I securitize it? And they just get
18:17
Speaker 4: bundled up different ways. And this is basically, look, how
18:19
Speaker 4: can I, you know, generate leverage on food?
18:27
Speaker 7: It just.
18:29
Speaker 2: And this is before you even get into just like
18:30
Speaker 2: the grossness like societally. Again, I feel like I've been
18:33
Speaker 2: harping on this stuff lately. So if someone can't afford food,
18:39
Speaker 2: you're gonna charge them interest.
18:42
Speaker 3: It doesn't seem right now. I again, I get it.
18:45
Speaker 2: That is takeout, So it's yeah, it's pretty discretionary food,
18:49
Speaker 2: it is. But it's still kind of like, I know you,
18:52
Speaker 2: I know you can't pay for this now. Yeah, I'm
18:55
Speaker 2: not gonna charge you interest, but it's got to show
18:57
Speaker 2: up somewhere.
18:58
Speaker 5: Yeah, you're gonna pay for it.
18:59
Speaker 2: So You're gonna pay for it somehow because there's no
19:01
Speaker 2: free launch, is the saying, I just I don't know this.
19:06
Speaker 3: This feels goofy to me.
19:09
Speaker 4: Yeah, it's just bad business all around. And yeah, just
19:15
Speaker 4: a dystopian, a dystopian feeling saying that I'm going to
19:17
Speaker 4: buy a thirty dollars meal and pay for it over
19:20
Speaker 4: a number of installments.
19:22
Speaker 3: Are there, like credit default swaps on burritos?
19:25
Speaker 7: Now?
19:26
Speaker 3: Yeah, is that where we're going? So you're gonna take
19:30
Speaker 3: a quick break here.
19:31
Speaker 2: When we come back, we get the trivia answer and
19:32
Speaker 2: then we're talking in video.
19:41
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20:17
Speaker 3: All right.
20:17
Speaker 6: Trivia question today was what year was Twitter launched? That
20:21
Speaker 6: would be two thousand and six. Gail from West Boils
20:25
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20:32
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20:40
Speaker 2: Mike, do you do you have your Fermians in order? No, Tucker,
20:46
Speaker 2: what about you?
20:47
Speaker 6: Oh yeah, absolutely yeah. We's got to stay on top
20:50
Speaker 6: of those Fermions.
20:51
Speaker 3: Yeah, the Fermians were.
20:53
Speaker 2: If you're not familiar with the term, Microsoft earlier this week,
20:58
Speaker 2: earlier this month unveiled some kind of quantum computing chip
21:02
Speaker 2: that has something to do with Fermians.
21:05
Speaker 3: I don't know what they are.
21:06
Speaker 2: They little sub atomic you know, quantum particles and something
21:11
Speaker 2: so that preachers that's what the term stems from. It's
21:14
Speaker 2: not you know, a star trek alien or something like that,
21:18
Speaker 2: but that's what I always think you mean, like ferbies.
21:20
Speaker 3: Now, the Fermians.
21:21
Speaker 2: These guys, the Fermians had a big war with the
21:24
Speaker 2: Klingons for interstellar domination.
21:26
Speaker 4: Things with the U with the mohawks, big eyes. Yeah,
21:30
Speaker 4: got it.
21:30
Speaker 3: Yeah, they're they're tougher than they look. Actually.
21:33
Speaker 2: Anyways, in Vidio CEO Jensen Huang during the they they
21:39
Speaker 2: were having some big in Vidia conference in the last
21:42
Speaker 2: couple of days, and he invited a bunch of quantum
21:46
Speaker 2: computing CEOs to it in order to apologize to them
21:49
Speaker 2: for saying that quantum computing was a reality that's fifteen
21:53
Speaker 2: to thirty years away, and he had them all there
21:56
Speaker 2: to say no, like it's actually going to be much sooner. Okay,
22:00
Speaker 2: I guess that's fine, But for the average person, this
22:06
Speaker 2: still doesn't mean anything, and we still don't know anything
22:08
Speaker 2: about when quantum computers are actually going to have any
22:12
Speaker 2: kind of legitimate impact in our lives.
22:14
Speaker 5: I don't either, but this is I have a question.
22:17
Speaker 4: I guess does this fall into the same category as
22:20
Speaker 4: these recent announcements of partnerships with General Motors and Taco
22:24
Speaker 4: Bell and and Nvidia just generally going out there on
22:28
Speaker 4: a PR campaign, because it.
22:32
Speaker 2: Feels a little different, doesn't it than like what they've
22:35
Speaker 2: done previously, Because for the last two years it was Hey,
22:38
Speaker 2: AI's great, AI is awesome, our sales are way up,
22:42
Speaker 2: We're good, and there's definitely something different.
22:47
Speaker 3: In the air now. I don't know exactly what it is, but.
22:54
Speaker 2: Again, it's just kind of odd to see this kind
22:57
Speaker 2: of thing, and this is not This is not a
23:00
Speaker 2: you know, the sky is falling, you know type of thing.
23:03
Speaker 3: It's much more.
23:05
Speaker 2: For the last couple of years, and all in Vidia
23:07
Speaker 2: had to do was show up every not in Vidia,
23:10
Speaker 2: but all in video and WOG needed to do for
23:12
Speaker 2: the last couple of years was show up every three months,
23:16
Speaker 2: say hey, we expected four billion in profit. Instead it
23:19
Speaker 2: came in at seven billion, and investors went wow, yeah.
23:24
Speaker 2: And now you're trying to announce this stuff every day,
23:27
Speaker 2: it seems like and it's I don't know, it doesn't
23:32
Speaker 2: feel It's not a great sign to me when a
23:38
Speaker 2: company that previously didn't really have to do any marketing
23:41
Speaker 2: is now feeling like they have to market.
23:43
Speaker 4: It's AI washing and I don't know if it's a
23:45
Speaker 4: threat that they feel from. Look, we had the big
23:48
Speaker 4: deep Seek innovation earlier this year. I'm not entirely sure
23:52
Speaker 4: what the where the pressure is coming from, or if
23:55
Speaker 4: it is actually a response to pressure. But it is
23:57
Speaker 4: just again interesting to announce partnerships that I think seem
24:03
Speaker 4: to me anyway to be designed to get in front
24:08
Speaker 4: of the average person instead of the one who. Let's
24:12
Speaker 4: be honest, a few years ago, very few people had
24:15
Speaker 4: actually heard of Nvidia, and no individuals out there are
24:18
Speaker 4: buying in Vidia chips. They only became famous when their
24:21
Speaker 4: stock price was one of the best performing companies in history.
24:24
Speaker 4: And so maybe this is an attempt to just get
24:27
Speaker 4: the name out there, because when you announce a partnership
24:29
Speaker 4: with Taco Bell, you certainly get a little bit more
24:32
Speaker 4: pressed for the average person layperson than you do when
24:35
Speaker 4: you're announcing a partnership with Microsoft.
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25:50
Speaker 2: So there's a pizza place in Summerville by the name
25:54
Speaker 2: of Dragon Pizza, and apparently sometime on Sunday they put
26:01
Speaker 2: up a social media post reporting that they had to
26:06
Speaker 2: throw out a group of quote entitled lazy parents for
26:09
Speaker 2: quote disrespecting the restaurant by allowing their unsupervised children to play.
26:13
Speaker 2: They didn't give any further details on it, but they
26:17
Speaker 2: did put in like some directives for you know, dining
26:22
Speaker 2: at Dragon Pizza with kids. They said, you know, we
26:26
Speaker 2: welcome all children dining. We do not welcome parents who
26:29
Speaker 2: do not want to share a dining experience with the children.
26:32
Speaker 3: Quote.
26:32
Speaker 2: We loathe parents who use our games as babysitters while
26:36
Speaker 2: they ignore their children and let them damage and abuse
26:38
Speaker 2: our games, and quote we do not appreciate parents who
26:42
Speaker 2: treat our pizza as a cheap, simple option to feed
26:44
Speaker 2: their children until they can have their own dinner. And
26:50
Speaker 2: basically it seems like everyone's decided to weigh in on
26:53
Speaker 2: this either by saying that like, the pizza shop is
26:55
Speaker 2: awful or that the parents must be awful, when really
26:58
Speaker 2: we have no idea what actually happened here, and I
27:03
Speaker 2: will be the first to like, I don't know. I'm
27:05
Speaker 2: not going to be like this person's right, that person's wrong,
27:08
Speaker 2: But I'm getting back to something we've touched on, which
27:12
Speaker 2: is there seems to be more of this happening lately
27:16
Speaker 2: in public, where there are disagreements that are going beyond
27:22
Speaker 2: what I think we previously thought was acceptable, and it
27:27
Speaker 2: indicates something broken about us in some way that we're
27:31
Speaker 2: getting to this point.
27:32
Speaker 3: I think, yeah.
27:34
Speaker 4: And I see businesses do this pretty frequently, of making
27:38
Speaker 4: a big social media post and making a big deal
27:40
Speaker 4: of it, and I think a lot of it probably
27:42
Speaker 4: comes from fear because they don't want a negative review
27:45
Speaker 4: on their website impacting their business. I've seen it from
27:48
Speaker 4: local restaurants right here in need them. There was a
27:51
Speaker 4: big kerfuffle about a local restaurant who is hosting I
27:56
Speaker 4: think what turned out to be a pretty controversial group
27:58
Speaker 4: at their restaurant and faced a bunch of backline ah
28:00
Speaker 4: yahdy yah ya, and they had to go on social
28:01
Speaker 4: media and post about all of this. I don't know.
28:05
Speaker 4: I don't know what to make of it. If it's
28:06
Speaker 4: a problem with the way that we just can't deal
28:09
Speaker 4: with each other, or it very well may be how
28:13
Speaker 4: we consume things these things these days, because quite honestly,
28:16
Speaker 4: if you are a business that gets a few really
28:19
Speaker 4: garbage online reviews, it can lead to very significant downturn
28:24
Speaker 4: in your eventual business.
28:26
Speaker 5: I don't I don't know what to make of it. Yeah,
28:28
Speaker 5: I have no idea if the parents were being totally
28:30
Speaker 5: there's no.
28:30
Speaker 2: Idea who's right or wrong on this, Like, I really
28:33
Speaker 2: don't know, And I'm not going to try to pass
28:35
Speaker 2: judgment because it seems like there's enough people passing judgment
28:39
Speaker 2: on you know, who's in the right or who's in
28:41
Speaker 2: the wrong. But it just feels like, again, whether you're
28:45
Speaker 2: talking about restaurants, we've gone through all of the different
28:49
Speaker 2: stuff on airplanes of people getting kicked off and this
28:52
Speaker 2: and that, and people yelling at each other.
28:54
Speaker 3: It gets We're just not very patient with each other
28:58
Speaker 3: right now, and it's not great.
29:04
Speaker 2: And I know we don't really say this often. It's
29:06
Speaker 2: kind of a loserious thing to say. But let's just
29:09
Speaker 2: be a little nicer when we're like seeing people. Man,
29:13
Speaker 2: you know, yeah, i've seen all on Ted once said
29:16
Speaker 2: be excellent to each other, and maybe that's what.
29:18
Speaker 3: We should be.
29:19
Speaker 5: Yeah, just common decency. Just could use a little more
29:22
Speaker 5: of that.
29:22
Speaker 3: Be a human.
29:23
Speaker 2: The AI is going to come for all of us
29:24
Speaker 2: and get us at some point, so just be nice
29:26
Speaker 2: to the humans, you see. Yeah, you know, let the
29:29
Speaker 2: AI be uh be the one to you know, get
29:33
Speaker 2: all up in our face.
29:34
Speaker 3: Let's take a quick break.
29:35
Speaker 2: When we come back, we are going to be joined
29:37
Speaker 2: by paul A Monica right after this, and we're gonna
29:40
Speaker 2: be very very nice to him.
29:43
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30:04
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30:41
Speaker 2: Paul Monica from Barons joins us now here to talk
30:44
Speaker 2: a little bit about well leverage single stock ETFs.
30:51
Speaker 3: Paul, how are you today?
30:53
Speaker 7: I am good. Yes, it's a wacky world we live in, Paul.
30:56
Speaker 2: For someone who's not familiar with the concept, what is
30:59
Speaker 2: a single stock EF either leveraged or unleveraged and why
31:02
Speaker 2: would one use that rather than actually owning or shorting
31:07
Speaker 2: the stock.
31:08
Speaker 7: Owning the common stock? Exactly? Yeah, I mean this is
31:11
Speaker 7: I think something that a lot of traders you know,
31:14
Speaker 7: might use for hedging or you know, to to kind
31:19
Speaker 7: of magnify a gain or loss and a stock as
31:23
Speaker 7: opposed to something that a buy and hold long term
31:26
Speaker 7: investor would want. So you know, typically these types of
31:30
Speaker 7: ETFs use derivatives to amplify the exposure of what would
31:36
Speaker 7: happen in an individual stock. So the Tesla short leveraged
31:40
Speaker 7: funds are designed to go up even more than what
31:47
Speaker 7: the stock price is going down at. So if you
31:50
Speaker 7: know Tesla's going down five percent, you have a two
31:54
Speaker 7: x leverage fund in theory be about nine to ten
31:57
Speaker 7: percent that the stock should that they CTFs should go up.
32:01
Speaker 7: And it's you know, the inverse of that for the
32:04
Speaker 7: long ETFs, which go up even more when Tesla stock
32:09
Speaker 7: is going up. But these are incredibly risky. Even though
32:14
Speaker 7: these short leverage Tesla ETFs have done well this year
32:18
Speaker 7: as Tesla stock has lunged for various reasons, you know,
32:22
Speaker 7: over the long haul, if you buy and hold these things,
32:25
Speaker 7: you're losing a lot of money because Tesla has still
32:27
Speaker 7: been a pretty good stock over the past year. So
32:29
Speaker 7: in for the past few years.
32:31
Speaker 2: How popular are these now, I mean, they've increased in popularity.
32:37
Speaker 7: Used to see decent volume and retail traders buying them
32:42
Speaker 7: as well, But the fund providers themselves do caution that
32:45
Speaker 7: you know, a lot of times these are really something
32:48
Speaker 7: that only more sophisticated investors, particularly short term traders, should
32:52
Speaker 7: be using as opposed to a long term investor. Like
32:56
Speaker 7: if you like the case for Tesla and Elon Musk,
33:00
Speaker 7: it's probably not a great idea to own one of
33:03
Speaker 7: these leverage gtfs. They're going to go up and down
33:06
Speaker 7: very wildly. Just just buy the stock.
33:09
Speaker 2: When you look at the potential downside of especially if
33:14
Speaker 2: you look at some of these you know, leveraged short ETFs,
33:17
Speaker 2: can you explain to any of our listeners, like where
33:21
Speaker 2: how does the potential downside materialize? And how big is
33:23
Speaker 2: the potential downside?
33:25
Speaker 7: Well, I mean when you think about you know, say,
33:28
Speaker 7: if you are shorting a stock, it's it's always talked
33:31
Speaker 7: about that one of the reasons why heavily shorted stocks
33:35
Speaker 7: can somewhat conversely go up a lot when there's good
33:40
Speaker 7: news is that if you're borrowing shares and selling them
33:44
Speaker 7: and you have to eventually buy them back, I mean,
33:46
Speaker 7: your losses are magnified the more that that stock goes up.
33:51
Speaker 7: So think about that and add leverage to it as well.
33:55
Speaker 7: It's just incredibly risky to be short a stock that
34:00
Speaker 7: can be volatile and might have the potential to go
34:04
Speaker 7: higher on good news. So it's why these leveraged inverse
34:10
Speaker 7: Tesla atfs have even though they are a great short
34:14
Speaker 7: term trade this year, because Tesla stock is down what
34:17
Speaker 7: so forty percent or so, partly due to all the
34:20
Speaker 7: concerns about Musk and Doge. You know, I think it's
34:24
Speaker 7: just dangerous to be short of stock like Tesla for long.
34:27
Speaker 7: I mean, Tesla's back up today in a little bit.
34:30
Speaker 7: I think partly because of the news he had that
34:31
Speaker 7: all hands meeting yesterday, and I think maybe there are
34:34
Speaker 7: some hopes that you know, Musk realizes that he can't
34:38
Speaker 7: pay exclusive attention to Washington, d C. And what he's
34:42
Speaker 7: doing there in the Trump administration. You know, he has
34:46
Speaker 7: a duty to his employees and shareholders to you know,
34:49
Speaker 7: run Tesla as well.
34:52
Speaker 2: Very good, Paul, We appreciate you joining us today. I
34:54
Speaker 2: hope you have a great weekend of watching a little
34:57
Speaker 2: bit of college basketball and we'll catch up with you soon.
35:02
Speaker 7: Yep, thank you very much. Looking forward to more March madness.
35:05
Speaker 7: Definitely not just the stock market.
35:06
Speaker 3: There you go.
35:07
Speaker 2: That is Paul la Monica from Baron's talking about these
35:11
Speaker 2: single stock leveraged and short leveraged just a p.
35:17
Speaker 5: S A on all that stuff.
35:18
Speaker 4: There's a lot of new types of ETF products out
35:22
Speaker 4: there that did not exist in any way, shape or form,
35:24
Speaker 4: whether it's the single stock leverage things or a bunch
35:28
Speaker 4: of ones that try and limit downside and cap upside.
35:32
Speaker 4: I guess the the point that I'm making about all
35:34
Speaker 4: these is they are all very, very new, and if
35:38
Speaker 4: you don't fully understand them, beware. Yeah, that's just a
35:43
Speaker 4: my statement for the day. Staying on Tesla for a moment,
35:46
Speaker 4: Edmonds the the what do we call them? Shopping site?
35:50
Speaker 3: Are they or like they do car reviews and the
35:54
Speaker 3: car experts.
35:54
Speaker 4: Yeah, they are reporting, but not car gurus, No, that's
35:58
Speaker 4: a different company. Yes, they are reporting that March represented
36:02
Speaker 4: the highest ever share that it had seen for Tesla
36:05
Speaker 4: trade ins towards new or used cars from dealerships selling
36:09
Speaker 4: other brands. So that story that we had alluded to
36:13
Speaker 4: of hey, you know, musks roll within the administration sparking
36:17
Speaker 4: some or just musks general behavior sparking some backlash, seems
36:20
Speaker 4: to be playing out in a I guess somewhat expected
36:25
Speaker 4: way and helps to explain some of the volatility they're
36:27
Speaker 4: seeing in the share price.
36:29
Speaker 2: A Southwest plane aborted a takeoff after they tried to
36:32
Speaker 2: take off on a taxiway rather than a runway. Now
36:37
Speaker 2: we again, I'm it's probably more complicated than we think
36:43
Speaker 2: it is. Oh, certainly, you know, I can understand how
36:47
Speaker 2: this happens because you go through any airport and you
36:50
Speaker 2: have taxiways that are parallel to every runway.
36:53
Speaker 3: Some of them might be wide.
36:55
Speaker 2: You might think you've turned onto the road, Like I can,
36:58
Speaker 2: I can understand this. I know that the easy thing
37:00
Speaker 2: to do is just to be like, oh, like, how
37:01
Speaker 2: could they ever do that?
37:02
Speaker 3: But I wouldn't.
37:05
Speaker 2: This is the kind of thing that does normally happen
37:07
Speaker 2: a few times a year, just because there's so many
37:10
Speaker 2: planes and these airports are busy and complex, and.
37:13
Speaker 4: I'm always curious about where the line is on this stuff.
37:16
Speaker 4: You know, I know we probably have a few pilots
37:18
Speaker 4: listening right now. But like the message that my uncle
37:23
Speaker 4: always gave when he had a job as a pilot
37:25
Speaker 4: for a number of years is just don't scratch the paint.
37:28
Speaker 5: It's not as though you get graded on a scale
37:32
Speaker 5: when you're a pilot. It's it's kind of pass fail.
37:34
Speaker 4: And I don't know if driving down the wrong runway
37:37
Speaker 4: thinking that it's a runway is a fail grade on
37:39
Speaker 4: that one and you actually lose your job on it.
37:41
Speaker 2: I don't know that you lose your job because of this,
37:44
Speaker 2: but I suspect that you're put on some kind of
37:45
Speaker 2: heightened supervision and training program and if anything happens during,
37:49
Speaker 2: you know, a probationary period afterwards. It's kind of like Bill,
37:53
Speaker 2: we talked about this. You don't try to take off
37:55
Speaker 2: on the taxiway.
37:56
Speaker 5: Yeah.
37:57
Speaker 3: So it's yeah, it's not great.
38:02
Speaker 5: High pressure job. Interesting, it is really interesting.
38:05
Speaker 3: I would not be good at it, Like I would
38:08
Speaker 3: not be good at it.
38:09
Speaker 2: Yeah, but uh yeah. So that's what we have the
38:12
Speaker 2: Southwest today. We're done for the entire weekend. I hope
38:16
Speaker 2: you all have a great weekend, enjoy a little bit
38:18
Speaker 2: of basketball. Markets down modestly today. We'll see how they
38:21
Speaker 2: do next week when we return