Latest / Brian Thomas / Money Monday
Transcript
- 0:00Speaker 1: It's 8.05 at 55 KRC Detox Station. Brian Thomas wishing
- 0:03Speaker 1: everyone a very happy Monday. Try to make it so anyway.
- 0:05Speaker 1: We're talking with State Representative Adam Burr at the bottom
- 0:07Speaker 1: of the hour about losing the supermajority in Ohio, but
- 0:09Speaker 1: still controlling the House and Senate. What can they get
- 0:11Speaker 1: accomplished before acting as governor? In the meantime, though, Brian
- 0:15Speaker 1: James out. He normally does Money Monday. He's a financial
- 0:18Speaker 1: planner with Allworth Financial, but taking his place today. Welcome
- 0:21Speaker 1: to the 55 KRC Morning Show, Certified Financial Planner Bob Sponseller.
- 0:26Speaker 1: It's great having you on today, Bob. Good to see
- 0:28Speaker 1: you as well.
- 0:30Speaker 2: Great to be with you, Brian. Happy Monday to you.
- 0:32Speaker 1: Phone ringing off the hook. We talk about it with
- 0:35Speaker 1: Brian all the time. You know, you got to be
- 0:37Speaker 1: a hand holder as a financial planner. You got to
- 0:39Speaker 1: keep people from jumping off the ledge, stop people from
- 0:41Speaker 1: making really stupid mistakes. And it's a challenging time when
- 0:45Speaker 1: the markets drop precipitously. I just want to get your
- 0:47Speaker 1: reaction to Wednesday. I mean, we knew at the result
- 0:51Speaker 1: of the election, but Wednesday the markets went up, and
- 0:54Speaker 1: that kind of surprised me. And then, no, it all
- 0:57Speaker 1: hits the fan on Thursday. Did it take the markets
- 0:59Speaker 1: that long to sort of judge the scope of the Democrats' win, Bob,
- 1:03Speaker 1: or what's your response?
- 1:05Speaker 2: Well, I'll try to keep politics out of it and
- 1:08Speaker 2: just do my best to call balls and strikes here, Brian,
- 1:11Speaker 2: which is what I always try to do. But I think— Wednesday,
- 1:15Speaker 2: the market does not like uncertainty. And any time you
- 1:17Speaker 2: go into an election, that's uncertainty. And I think we
- 1:20Speaker 2: got a little bit of a reprieve in the markets
- 1:22Speaker 2: on Wednesday because everybody took a big exhale and said,
- 1:26Speaker 2: all right, I'm not getting text messages every 30 seconds
- 1:29Speaker 2: on my phone. I'm done with all these crazy TV ads.
- 1:32Speaker 2: The election's over. We finally know what we're going to get.
- 1:35Speaker 2: Life's going to move on. The market took a big exhale.
- 1:39Speaker 2: And we had a nice up day. Now, then reality
- 1:42Speaker 2: started to hit. On Thursday, it takes all these money managers,
- 1:46Speaker 2: portfolio managers, a little time to kind of sift the
- 1:49Speaker 2: wheat from the chaff here and say, what is this
- 1:51Speaker 2: actually going to mean for specific sectors of the markets?
- 1:55Speaker 2: And as we all know, Thursday was a pretty ugly day.
- 2:00Speaker 2: Getting down to specifics, you know, the overall S &
- 2:02Speaker 2: P 500 fell about four and a half percent. But
- 2:06Speaker 2: the real damage was done in that semiconductor index, which
- 2:10Speaker 2: fell the big semiconductor stocks, the chip stocks, the Dells,
- 2:16Speaker 2: the Microns, all those household names that have been on
- 2:21Speaker 2: a tear, AMD, NVIDIA, Broadcom, Micron. That index, Brian, fell 12.2%.
- 2:28Speaker 2: in one day. And I think this is all about
- 2:31Speaker 2: data centers. We had 41 ballot measures across the country
- 2:38Speaker 2: in different states on Tuesday, 21 of which were in
- 2:43Speaker 2: the state of Ohio. And Brian, 40 of the 41
- 2:47Speaker 2: data center ballot measures went down to defeat. So, you know,
- 2:52Speaker 2: the best sense I can make of this, the best
- 2:55Speaker 2: analogy I can give you is let's say you and
- 2:58Speaker 2: I have season tickets to Ohio State football. We're going
- 3:01Speaker 2: to jump in the car every Saturday morning and head
- 3:03Speaker 2: up to Columbus to watch football. And we know that
- 3:07Speaker 2: the speed limit on 71 is 70 miles an hour.
- 3:12Speaker 2: I think after these elections on Tuesday, the speed limit
- 3:16Speaker 2: just dropped to maybe 45 to 50 miles an hour.
- 3:19Speaker 2: We're still going to get to Columbus. We're still going
- 3:21Speaker 2: to get to watch football. We're still going to have
- 3:24Speaker 2: data centers built. But the speed at which those data
- 3:28Speaker 2: centers are going to get built, I think it's safe
- 3:31Speaker 2: to say, are going to slow down a little bit.
- 3:33Speaker 2: And I think that's what happened to the markets on Thursday.
- 3:37Speaker 2: We got a little bit of a bounce on Friday
- 3:39Speaker 2: back up. Futures this morning are up. So I think
- 3:42Speaker 2: everybody is starting to settle down a little bit and
- 3:46Speaker 2: realize that this is not Armageddon. But the speed of
- 3:50Speaker 2: this AI build out is going to be a little
- 3:52Speaker 2: bit slower and a little more deliberate than people may
- 3:55Speaker 2: have priced into the market.
- 3:56Speaker 1: Well, reading tea leaf leaves, I personally got the impression
- 3:59Speaker 1: that it wasn't so much that the data centers were
- 4:02Speaker 1: noisy or use power, especially if you have both Republicans
- 4:06Speaker 1: and Democrats arguing that, well, no, we're going to require
- 4:08Speaker 1: them to bring the power. So if you take that
- 4:10Speaker 1: power consumption element out and higher energy bills out of
- 4:13Speaker 1: the equation, at least theoretically, there's nothing to worry about there.
- 4:16Speaker 1: I think most of the water issues were really truly
- 4:19Speaker 1: resolved and not a problem based on.
- 4:20Speaker 2: Closed loop systems.
- 4:21Speaker 1: So This to me is people's, I think, generally freaking
- 4:25Speaker 1: out and quite rightfully so about what artificial intelligence does.
- 4:30Speaker 1: But Bob, my position has all along been artificial intelligence
- 4:35Speaker 1: and what it does is not going away ever. And
- 4:39Speaker 1: that the control of it needs to be in our
- 4:41Speaker 1: United States hands versus obviously our biggest competitor in the
- 4:44Speaker 1: AI world is the Chinese Communist Party. But We're going
- 4:47Speaker 1: to have to get our hands around and people who
- 4:48Speaker 1: are concerned about what it can do. Do you want
- 4:50Speaker 1: a regulatory environment brought to you by the United States?
- 4:53Speaker 1: You didn't want one brought to you by the Chinese.
- 4:55Speaker 2: We got to have, amen. So that's right. This stuff's
- 4:58Speaker 2: either going to get built here or it's going to
- 5:00Speaker 2: get built in China. Um, and, and these things are
- 5:03Speaker 2: going to get built, but I think, you know, and again,
- 5:05Speaker 2: I'm trying to stay as neutral here politically as possible,
- 5:09Speaker 2: but the democratic party did a wonderful job of messaging
- 5:13Speaker 2: on this topic and And I would say these large
- 5:16Speaker 2: tech companies and the Republican Party did a horrible job
- 5:19Speaker 2: of messaging. I mean, just go up the road to Trenton, Ohio.
- 5:23Speaker 2: I mean, Brian, that was an 80-20 vote up there
- 5:26Speaker 2: to reject that data center. Obviously, those people up there
- 5:31Speaker 2: did not feel good about it because people did not
- 5:33Speaker 2: communicate effectively with them. And I think that's what you're
- 5:36Speaker 2: going to see change over the next 6, 12, 18 months.
- 5:40Speaker 2: It's going to get done. But these folks are going
- 5:43Speaker 2: to have to go in there and tell local citizens.
- 5:46Speaker 2: And Brian, I am a big state and local government guy.
- 5:50Speaker 2: I love local government, local people getting together and deciding
- 5:54Speaker 2: what they want and don't want. I think we need
- 5:57Speaker 2: to tune out all this noise and hearings and pontificating
- 6:01Speaker 2: from these federal government officials. This is these are state
- 6:05Speaker 2: and local issues. And I think the Amazons of the
- 6:08Speaker 2: world are going to have to go in there and
- 6:10Speaker 2: sit down with the local people and make it worth
- 6:13Speaker 2: their while to build one of these things in their community.
- 6:16Speaker 2: And I think they will.
- 6:17Speaker 1: I agree with you completely. It's just going to be
- 6:20Speaker 1: a little slower process, which is, I concede your point
- 6:22Speaker 1: on that. It's pretty obvious it's going to be a
- 6:24Speaker 1: slowdown in the processes here, which may be a good
- 6:26Speaker 1: thing overall, as long as people don't try to bring
- 6:29Speaker 1: it to a screeching halt, because I can't see that happening.
- 6:31Speaker 2: Anything else?
- 6:32Speaker 1: I mean, you mentioned, I think, when Trump utters anything
- 6:36Speaker 1: relative to the situation with the Iran's, I mean, he
- 6:38Speaker 1: can say we're going to bomb tomorrow or we're no,
- 6:40Speaker 1: it looks like we're going to enter into an agreement,
- 6:41Speaker 1: which is the most recent pronouncement. Doesn't look like he's
- 6:43Speaker 1: going to be dropping bombs. The markets do react to that,
- 6:47Speaker 1: whether it's right or wrong. The price of oil down
- 6:50Speaker 1: a little bit at the price of the pump, according
- 6:52Speaker 1: to gas buddy is now under $ 4, which is a
- 6:54Speaker 1: welcome relief. How long it lasts, how much is the
- 6:57Speaker 1: energy sector involved in the market fluctuations from last week?
- 7:01Speaker 1: And where do you see it going forward?
- 7:04Speaker 2: Well, you know, diesel fuel, the price of diesel fuel
- 7:07Speaker 2: matters a lot. And I think we're all used to
- 7:10Speaker 2: President Trump going on there and saying, yeah, I might
- 7:13Speaker 2: bomb them tomorrow. I might not. We have a deal.
- 7:16Speaker 2: You know, they want to make a deal and then
- 7:17Speaker 2: they don't want to make a deal. I think the
- 7:19Speaker 2: American public is used to that. I also think they're
- 7:22Speaker 2: tired of that. We've got to get diesel oil prices down.
- 7:28Speaker 2: Roughly 60% of all goods that ordinary citizens buy every
- 7:32Speaker 2: day travel by truck, which require diesel fuel. We got
- 7:35Speaker 2: to get that price down. We got to get that
- 7:38Speaker 2: blockade in the Strait of Hormuz settled. And we got
- 7:41Speaker 2: to get refined diesel fuel flowing again. Your guess is
- 7:45Speaker 2: as good as mine is when that's going to happen.
- 7:47Speaker 2: But broadly speaking, people are tired of inflation. President Trump
- 7:53Speaker 2: in his first term did a great job of making
- 7:57Speaker 2: life better from a cost of living standpoint for everyday Americans.
- 8:03Speaker 2: And he was rewarded for that. During the first two
- 8:06Speaker 2: years of this administration, he came in promising that he
- 8:10Speaker 2: would bring us off of this 20 plus accumulated inflation
- 8:15Speaker 2: under the last administration. And Brian, obviously it hasn't happened.
- 8:19Speaker 2: And the voters responded in kind last week.
- 8:23Speaker 1: And overwhelmingly so. And I guess I understand it on
- 8:27Speaker 1: a lot of levels. We can all draw our own
- 8:28Speaker 1: conclusions why he got such a thorough drubbing. But I
- 8:32Speaker 1: guess the response is, well, wait a second. Everybody wants
- 8:35Speaker 1: things more affordable. Donald Trump said he would bring prices
- 8:38Speaker 1: down and make them more affordable. next act is Democrats
- 8:42Speaker 1: delivering on their promise to deliver affordability. I've always viewed
- 8:45Speaker 1: that as an impossible task. There are so many forces
- 8:48Speaker 1: out in the world that have an impact on inflation
- 8:50Speaker 1: or affordability. How can any political party or one person
- 8:54Speaker 1: change the dynamic?
- 8:57Speaker 2: Well, that's, what's going to be interesting in 2027. Um,
- 9:01Speaker 2: you could talk about bringing prices down. And again, Brian, you're,
- 9:04Speaker 2: you're baiting me here and I'm probably going to swallow
- 9:06Speaker 2: the bait. Um, The thing that Democrats like to do
- 9:10Speaker 2: is spend money. That's what they're good at doing. And
- 9:14Speaker 2: when the government spends money, inflation tends to go up,
- 9:18Speaker 2: not down. So it's going to be very interesting to
- 9:21Speaker 2: see how affordability, in quotes, is going to become a
- 9:24Speaker 2: thing next year. I think it's all going to be
- 9:27Speaker 2: tied to when we get the price of energy down.
- 9:30Speaker 2: And President Trump and his administration is still running the
- 9:35Speaker 2: show in terms, like it or not, in terms of
- 9:38Speaker 2: this conflict with Iran. I think that's going to be
- 9:40Speaker 2: the real wild card here, because if you take away
- 9:43Speaker 2: energy prices, inflation really is fairly tame and getting a
- 9:49Speaker 2: little bit better in most sectors of the economy. We
- 9:52Speaker 2: just got to get this diesel fuel down. And again,
- 9:55Speaker 2: your guess is as good as mine as to when
- 9:57Speaker 2: that happens.
- 9:58Speaker 1: What's the likelihood that we build a new refinery, Bob?
- 10:02Speaker 1: You can hear the tone of my voice.
- 10:04Speaker 2: We haven't had a high capacity refinery built in this country, Brian,
- 10:08Speaker 2: correct me if I'm wrong, since 1977. And I think
- 10:12Speaker 2: that's the irony here is everybody complaining about the price
- 10:16Speaker 2: of gas is Politicians included, these are the same people
- 10:21Speaker 2: that did not want any refineries built. They closed some
- 10:25Speaker 2: existing refineries. We waged war on the coal industry. We
- 10:30Speaker 2: closed natural gas pipelines. Then when we tried to cut
- 10:34Speaker 2: a little bit of waste in government, we had people
- 10:37Speaker 2: firebombing Elon Musk's Tesla dealership. That's where I find the
- 10:42Speaker 2: big irony to be here is people that were harping
- 10:45Speaker 2: and harping about energy prices. literally because of oil and
- 10:50Speaker 2: gas is too high. I know. And this is a
- 10:52Speaker 2: commodity that they wanted to eliminate 100%. So that's politics
- 10:59Speaker 2: in 2026, Brian.
- 11:00Speaker 1: Bob, I've been talking that line for months and months now.
- 11:03Speaker 1: Don't you get it? The price of gasoline necessarily will
- 11:06Speaker 1: go up, said Barack Obama a multitude of times, and
- 11:09Speaker 1: that's exactly what they want. This is like the greatest
- 11:11Speaker 1: gift ever. If you want to get rid of fossil fuels,
- 11:14Speaker 1: then the price of gasoline goes through the roof. And Already,
- 11:17Speaker 1: I headlined Democrats planning to push clean energy to lower bills. Okay,
- 11:23Speaker 1: I can never figure out how that's going to work.
- 11:24Speaker 2: Don't go away.
- 11:25Speaker 1: We'll get away from real hardcore politics and find out
- 11:28Speaker 1: what the future looks like, at least in the mind
- 11:30Speaker 1: of Bob Sponsella from Allworth, financially certified planner. Don't go away.
- 11:34Speaker 1: I'll be right back after I mention Queen City painting
- 11:37Speaker 1: and decorating.
- 11:38Speaker 2: Outstanding.
- 11:41Speaker 1: It is 819 at the 55KRCD talk station.
- 11:43Speaker 2: It's Monday. We're doing the Money Monday thing.
- 11:45Speaker 1: All Earth Financial's Bob Sponseller taking over for Brian James today.
- 11:48Speaker 2: He's out.
- 11:49Speaker 1: He's a certified financial planner. He's trying to keep his
- 11:51Speaker 1: clients from doing.
- 11:53Speaker 2: The wrong thing.
- 11:54Speaker 1: Counselor in volatile times as well.
- 11:58Speaker 2: Where are we going?
- 11:59Speaker 1: Going back to the energy thing. Everybody knows that I'm
- 12:01Speaker 1: a huge fan of small modular reactors. And there's quite
- 12:03Speaker 1: a few companies, Bob, that are making these. It's sort
- 12:06Speaker 1: of off the shelf, one size fits all. You don't
- 12:08Speaker 1: have to do individual planning and individual... a factory or
- 12:13Speaker 1: power generating plants and need their individual approval. So once
- 12:16Speaker 1: one gets approved, like pick it off the shelf, just
- 12:19Speaker 1: plop it down and there's your energy. Very little to
- 12:21Speaker 1: no waste. It all sounds like a wonderful idea. Are
- 12:23Speaker 1: these companies publicly traded and are these small modular reactor
- 12:27Speaker 1: companies doing well? Is this an area that we can
- 12:30Speaker 1: be optimistic over, Bob? Because I think it's the future
- 12:33Speaker 1: for our energy needs.
- 12:35Speaker 2: I totally agree with you, Brian. Unfortunately, most of these
- 12:38Speaker 2: companies that are really killing it right now are privately traded.
- 12:40Speaker 2: So if you look on the private equity side of things,
- 12:44Speaker 2: that's definitely a space you want to look. Look in
- 12:47Speaker 2: the private equity world for firms that could get you
- 12:50Speaker 2: involved in some of these emerging, early producing alternative energy stocks.
- 12:57Speaker 2: I mean, the energy sector, earnings growth after the third
- 13:01Speaker 2: quarter earnings have just come out are up 151% year
- 13:05Speaker 2: over year this year. So that's definitely a place to look.
- 13:09Speaker 2: I think you're spot on there, Brian. Speaking of earnings,
- 13:12Speaker 2: I do think last week's overall market sell-off overlooks just
- 13:16Speaker 2: how broad corporate profit growth has been this year. Third
- 13:21Speaker 2: quarter earnings season is nearly complete now, as 88% of
- 13:25Speaker 2: the S & P 500 has reported. Third quarter profits
- 13:29Speaker 2: overall are up a third. Yep, 33% over the past year,
- 13:34Speaker 2: which is well above the 24.5% Wall Street was expecting.
- 13:38Speaker 2: But if you just strip out AI, you know, completely
- 13:41Speaker 2: eliminate it, the S & P 500 index X AI
- 13:45Speaker 2: stocks is still up almost 24%. So, you know, We
- 13:50Speaker 2: are getting an overall productivity boost across the economy due
- 13:56Speaker 2: to AI, and it is starting to show up in
- 13:59Speaker 2: sectors other than the tech space. And I think that
- 14:02Speaker 2: bodes well moving forward, as long as we talked about before,
- 14:07Speaker 2: our newly elected government officials do not overreach here and
- 14:12Speaker 2: get too involved in the markets.
- 14:14Speaker 1: Well, you mentioned the 12.2% sell-off at NASDAQ and all
- 14:17Speaker 1: the chips and related companies.
- 14:19Speaker 2: Just the stocks, not the overall NASDAQ. Okay. Yeah, just
- 14:23Speaker 2: the stocks.
- 14:24Speaker 1: Well, I have been listening to, and no financial planner
- 14:27Speaker 1: am I, and market forces can bewilder me and perplex
- 14:30Speaker 1: me from time to time, but the AI bubble that
- 14:32Speaker 1: is going to burst. I keep hearing that, hearing it.
- 14:34Speaker 2: We've seen it before.
- 14:35Speaker 1: We had the internet bubble burst and the real estate
- 14:38Speaker 1: bubble burst. Is there an AI bubble bursting, Bob, that
- 14:41Speaker 1: you can see? Does this slow down, maybe slow down
- 14:43Speaker 1: the reality of that happening? What's your tea leaf forecasting
- 14:47Speaker 1: on that?
- 14:48Speaker 2: I don't see any bubble at all. I mean, it
- 14:51Speaker 2: all defines how you define the term bubble. I mean,
- 14:54Speaker 2: for somebody that was dramatically overweighted in the semiconductor stocks
- 14:59Speaker 2: last Thursday and lost 12% of their money in one day, yeah,
- 15:04Speaker 2: they'll call that a bubble. I think the market is
- 15:07Speaker 2: an excellent pricing mechanism or discount pricing mechanism of where
- 15:11Speaker 2: it sees things six to 12 months from now. And
- 15:14Speaker 2: I think it's safe to say Things got a little
- 15:17Speaker 2: ahead of themselves in some of these AI names and
- 15:20Speaker 2: semiconductor stocks. And this is just a return to reality.
- 15:25Speaker 2: It's not a bear market. It's not a 78% collapse
- 15:30Speaker 2: in the NASDAQ like we saw in the dot-com era.
- 15:34Speaker 2: Stick with good quality companies. Remember back when the whole
- 15:38Speaker 2: thing fell out of bed in the early 2000s, we
- 15:40Speaker 2: were buying anything with dot-com behind its name. Yeah. Think
- 15:44Speaker 2: of like Pets.com, things like that. A lot of those
- 15:47Speaker 2: companies completely went out of business. That is not going
- 15:50Speaker 2: to be the case here in these large companies with
- 15:54Speaker 2: good balance sheets. It's just a pullback. And that happens.
- 15:58Speaker 2: I mean, people forget the market on average goes down
- 16:02Speaker 2: intra-year about 19% every year, at least one time. And
- 16:08Speaker 2: as we know, the market averages year over year, 9%, 10%.
- 16:12Speaker 2: So you got to build your financial plan accordingly and
- 16:17Speaker 2: get out in front of some of this volatility, which
- 16:20Speaker 2: always happens, always has, always will. And the money that
- 16:24Speaker 2: you're going to need to repave your driveway or replace
- 16:27Speaker 2: your roof or go on your vacation next spring is
- 16:30Speaker 2: should not have been in stocks in the first place
- 16:33Speaker 2: or technology stocks in particular. That's what good, sound financial
- 16:37Speaker 2: planning is all about. But Brian, our phones aren't ringing
- 16:40Speaker 2: off the hook. Our clients aren't panicking because we've been
- 16:43Speaker 2: talking to them about this stuff all year. And for
- 16:46Speaker 2: the people that listened, they were ready for this and
- 16:49Speaker 2: have done the appropriate rebalancing in their portfolio.
- 16:53Speaker 1: Amen to that. That's why I'm glad I have a
- 16:55Speaker 1: financial planner to keep me out of the mix, talk
- 16:57Speaker 1: me off the ledge, and keep me from doing stupid things,
- 17:00Speaker 1: which is what you guys are great at.
- 17:02Speaker 2: That's our job. It is. Keep people from doing stupid
- 17:05Speaker 2: things from which they can't recover. That's the whole reason
- 17:07Speaker 2: we have a job, bro.
- 17:08Speaker 1: And hopefully at the end of the year, show them
- 17:10Speaker 1: you have a really healthy return on the money invested.
- 17:13Speaker 1: Bob Sponseller, certified financial planner with Allworth. I appreciate the
- 17:16Speaker 1: time you spent with my listeners and me today. Really
- 17:18Speaker 1: enjoyable conversation, Bob. And thanks for Allworth for loaning you
- 17:21Speaker 1: out for this segment. Maybe you and I will get
- 17:22Speaker 1: to talk again.
- 17:24Speaker 2: I look forward to that. Thanks for the time, Brian.
- 17:26Speaker 2: Been my pleasure. Take care, Bob. Stick around, folks.
- 17:28Speaker 1: State Representative Adam Brown.