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Is the tech rally losing steam? · The Financial Exchange Show

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Speaker 1: a donation today. This is the Financial Exchange with Chuck Zada,
1:06
Speaker 1: and Mike Armstraw.
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Speaker 2: Chuck, Mike and Tucker with it, and we got markets
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Speaker 2: not really doing too much of anything. The Dow is
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Speaker 2: technically off half a percent, but that's basically because a
1:21
Speaker 2: handful of components like five out of the thirty or
1:23
Speaker 2: down one to quarter percent or more. Whereas when you
1:26
Speaker 2: look at the S and P five hundred, which has
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Speaker 2: five hundred companies, actually not quite a little bit more
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Speaker 2: than that right now, that's only off a tenth of
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Speaker 2: a percent, and the Nasdaq composits up a quarter percent,
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Speaker 2: so not really too much going on that suggests any
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Speaker 2: major deviation from equity markets as to, you know, kind
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Speaker 2: of where we finished Friday.
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Speaker 3: When we take a look at.
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Speaker 2: The bond market, a little bit of an upward moving
1:50
Speaker 2: yields ten year Treasury up two point nine basis points
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Speaker 2: to four point two eight seven percent, still not anything
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Speaker 2: meaningful and not giving back all Friday's gains on bonds.
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Speaker 2: So ultimately a little bit of a shift, but I'm
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Speaker 2: not really sure that there's too much meat on that bone.
2:05
Speaker 2: When we take a look at commodity markets, Oil West
2:09
Speaker 2: Texas Intermediate up ninety nine cents a barrel to sixty
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Speaker 2: four sixty five and we've got gold up seventy cents
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Speaker 2: an ounce. Wow, glad we got out of bed for
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Speaker 2: that one at thirty four nineteen and twenty cents. So
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Speaker 2: market's pretty quiet today. Quite honestly, last week they were
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Speaker 2: pretty quiet overall. It's just you had, you know, about
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Speaker 2: a one and a half percent slide heading into Friday,
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Speaker 2: and then markets rallied one and a half percent, so
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Speaker 2: it seemed exciting, but ultimately not too much really happened.
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Speaker 2: It was just Okay, we had to get through the
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Speaker 2: FED through J. Powell, and now we're onto the next thing,
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Speaker 2: which does bring us to I think a great topic here.
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Speaker 2: Tech rally shows signs of losing steam. Well forgive me
2:53
Speaker 2: if I've heard this about a dozen times in the
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Speaker 2: last two and a half years, but.
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Speaker 3: Yeah, you got to prove it to me.
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Speaker 2: I'm not saying that there haven't been times where Tech's
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Speaker 2: underperformed the second half of last year. In Q one
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Speaker 2: of this year, Tech did underperformed, but ultimately that was
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Speaker 2: a relative consolidation that Tech went through, and it bounced
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Speaker 2: back with an absolutely ridiculous last three four months here
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Speaker 2: since the second half of April. So I think that
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Speaker 2: when I hear about, you know, the Tech rally showing
3:26
Speaker 2: signs of losing steam, we might be seeing it in
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Speaker 2: the stocks and in kind of the pricing movement. For
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Speaker 2: me to really believe that Tech is going to lose steam,
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Speaker 2: you've got to actually see it in the numbers, in
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Speaker 2: the earnings, in the revenue, in the capex. And that's
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Speaker 2: something that we just haven't seen yet. And at some
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Speaker 2: point you're going to because we're not going to become
3:52
Speaker 2: the United States of Amazon or the United States of Microsoft.
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Speaker 3: God, I hope not. You know, it's not gonna be,
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Speaker 3: you know that thing.
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Speaker 2: But I just look at this and I hesitate to
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Speaker 2: call top in tech just because I don't think I'm
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Speaker 2: qualified to do so. But b Okay, like, if we've
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Speaker 2: played this game, you know, ten times in the last
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Speaker 2: couple of years, it's been a pretty losing game to
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Speaker 2: be playing.
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Speaker 4: Yeah, yeah, shorting tech anytime over the last well twenty
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Speaker 4: two and a half years, two and a half. But like,
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Speaker 4: take a longer term outlook on this, since the dot
4:32
Speaker 4: com bubble has not been a great proposition.
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Speaker 3: Tech wasn't what it.
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Speaker 2: I think sometimes we forget that, like us, tech wasn't
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Speaker 2: what it was until the last few years.
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Speaker 3: Absolutely.
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Speaker 4: I mean, you go take a look at his composition
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Speaker 4: of the S and P five hundred going back to
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Speaker 4: the early twenty tens, I think it was less than
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Speaker 4: half of what it is now. So I don't mean
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Speaker 4: to to minimize that that massive changing factor here.
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Speaker 2: Well, I think also, like, let's look at tech. Just
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Speaker 2: let's look at this in the context of Okay, show
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Speaker 2: me how tech actually performed relative to the other industries
5:13
Speaker 2: in the S and P five hundred. We've got eleven
5:16
Speaker 2: different sectors in the SMP and we kind of have
5:18
Speaker 2: to back into this just because not all of them
5:20
Speaker 2: were like they've kind of moved things around in this
5:23
Speaker 2: and that historically. But if you look at this and say, okay,
5:27
Speaker 2: back in twenty ten, tech was, depending on the metric
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Speaker 2: that you're looking at, either the eighth or ninth best
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Speaker 2: performing out of them. In twenty eleven, it was the
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Speaker 2: seventh best. In twenty twelve, it was the eighth best.
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Speaker 2: In twenty thirteen, it was the fifth. In twenty fourteen
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Speaker 2: and fifteen it was the fourth best. In twenty sixteen
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Speaker 2: it was the seventh best. Then you went on this
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Speaker 2: run in twenty seventeen, eighteen, nineteen, and twenty where it
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Speaker 2: was basically in those years just absolutely crushing everything else
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Speaker 2: aside eighteen where you know, it was basically flat, and
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Speaker 2: then it had a Monster twenty three as well in
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Speaker 2: Monster twenty four. So it's really since twenty seventeen that
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Speaker 2: tech has been you know, kind of what we think
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Speaker 2: of it, and even more recently, like since twenty three
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Speaker 2: that has done. There's the crazy stuff that is out there,
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Speaker 2: but it feels like forever just because like it's been
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Speaker 2: so dominant the last few years, but there's always this
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Speaker 2: rotation that's going on, and some years it's this, some
6:31
Speaker 2: years it's that. I just I I always come back to,
6:37
Speaker 2: like this, the story about emerging markets investments, where you know,
6:41
Speaker 2: if you looked from like nineteen ninety through two thousand
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Speaker 2: and seven, EM crushed the S and P five hundred
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Speaker 2: demolished it, Like you had institutional investors being like why
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Speaker 2: am I invested in US stocks? Like I wish I
6:52
Speaker 2: could change my mandates somehow because EM's where all the
6:55
Speaker 2: growth is.
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Speaker 3: Well, the last eighteen years have.
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Speaker 2: Been the polar opposite of that, and and they don't
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Speaker 2: ring a bell when the regime changes for investments. You know,
7:04
Speaker 2: they don't say, okay, everybody into the pool adults swim like,
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Speaker 2: they don't do that. You kind of just have to
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Speaker 2: figure it out. And so I do think it's interesting
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Speaker 2: to have the thought of, hey, what and when, like
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Speaker 2: what do we have to be aware of in terms
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Speaker 2: of when this run of tech dominance could end? But
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Speaker 2: I also think that trying to jump the gun and
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Speaker 2: being like, hey, we gotta get you know, like everybody
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Speaker 2: out of tech.
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Speaker 3: Let's let's not go too far on this, yep, you know.
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Speaker 4: Yeah, especially when people are talking about, oh, that tech
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Speaker 4: rally seems to have really lost steam over the last
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Speaker 4: week and a half, that maybe it just yeah, and
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Speaker 4: I hope you have a really good model for why
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Speaker 4: that's going to hold steady.
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Speaker 3: Yeah, it's why is that going to matter?
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Speaker 2: Will it matter a we gonna half from now right
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Speaker 2: or a decade and a half right now? Because if
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Speaker 2: all you're looking at is like the last ten days,
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Speaker 2: tech's been a little wobbly. Okay, it looked wobbly for
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Speaker 2: nine months and then showed up and you know, promptly
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Speaker 2: beat everything down over the last you know, four months
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Speaker 2: or so. So I don't know I don't know that
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Speaker 2: there's too much there, but I don't know. Interesting to
8:22
Speaker 2: see people talking about it. And generally, when this stuff
8:28
Speaker 2: actually matters is when people aren't talking about it.
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Speaker 3: That's kind of what I tend to find. Let's take
8:33
Speaker 3: a quick break here.
8:33
Speaker 2: When we come back, we've got trivia right after this.
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9:41
Speaker 2: So on Friday, we received confirmation that Intel is going
9:46
Speaker 2: to agree to allow the US government to take a
9:51
Speaker 2: ten percent stake in the company. It's gonna be worth
9:53
Speaker 2: about eight point nine billion dollars. This is funding that
9:57
Speaker 2: was already appropriated through the Chips Act, that was supposed
10:00
Speaker 2: to be in the form of a grant, that is
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Speaker 2: now going to be in the form of an equity
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Speaker 2: stake instead. Over the weekend and into today, the Trump
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Speaker 2: administration said they would look to likely take equity stakes
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Speaker 2: in additional companies as they look to you know, allocate funds.
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Speaker 2: Unclear if that's you know, specifically in the semiconductor industry
10:24
Speaker 2: or elsewhere. But now the question I think is out there,
10:28
Speaker 2: and again there's there's a reason why we we typically
10:32
Speaker 2: you know, don't see this in the United States is
10:36
Speaker 2: because you start to wonder, if you are operating, whether
10:39
Speaker 2: it's a large, publicly traded company or a smaller privately
10:42
Speaker 2: held one, Hey, does the government need to have a
10:45
Speaker 2: stake in my business in order for us to be
10:48
Speaker 2: able to operate a certain way or receive funding or
10:51
Speaker 2: whatever it might be.
10:52
Speaker 3: It's a very open question.
10:54
Speaker 4: I mean, you know, the the Pentagon announced a stake
10:57
Speaker 4: in what was the Rare Earth Company.
11:00
Speaker 2: So that I thought made a little bit more sense
11:02
Speaker 2: the MP materials deal.
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Speaker 3: I'm with you in terms of it making sense.
11:06
Speaker 4: Like I get that it's a strategic defense interest.
11:12
Speaker 2: So that the Pentagon was announcing that they were going
11:14
Speaker 2: to be buying a certain amount of the materials each
11:17
Speaker 2: year and setting a floor for pricing so that you
11:20
Speaker 2: could produce it. The US government, to my knowledge, is
11:22
Speaker 2: not saying we're going to buy Intel chips because what
11:26
Speaker 2: are we going to do with them? Like, it's you know,
11:28
Speaker 2: where's the DoD needs that stuff? And so I think
11:31
Speaker 2: for you know, critical defense things, it's the technical term.
11:35
Speaker 2: I believe for critical defense products, you can make a case, yeah,
11:39
Speaker 2: the DoD probably should be directly involved in making sure
11:44
Speaker 2: that you have a minimum supply of the things that
11:46
Speaker 2: are needed there for broad based semiconductors, it's kind of like.
11:51
Speaker 4: I get that it's a slippery slope argument, Chuck, and
11:54
Speaker 4: I think that's your point. But I think that's the
11:56
Speaker 4: exact argument that Trump administration would make here is this
11:59
Speaker 4: is a bet out to the United States securing a
12:02
Speaker 4: critical supply of future semiconductor manufacturing and we'd deem that
12:06
Speaker 4: necessary to defense interests. I guess again, I don't find
12:10
Speaker 4: the argument compelling, but I think that's the argument they
12:12
Speaker 4: would know.
12:12
Speaker 2: No, this is a good conversation to have, though, And
12:15
Speaker 2: here's why I think this is different. The market is
12:19
Speaker 2: speaking as it relates to when it comes to rare
12:25
Speaker 2: earth materials, the market spoke this year and said, the
12:28
Speaker 2: US needs these and we can't produce these. We heard
12:30
Speaker 2: from all kinds of companies saying, hey, there's a problem
12:33
Speaker 2: of China cuts this off. When it comes to Intel,
12:36
Speaker 2: the market's been speaking in the exact same way. Intel's
12:38
Speaker 2: been making plenty of product and the market has been saying, no,
12:42
Speaker 2: we're not interested in that.
12:44
Speaker 3: Yeah, like Intel's been.
12:45
Speaker 2: Trying to run its business and the market has been saying,
12:49
Speaker 2: you guys are not making stuff at the caliber that
12:52
Speaker 2: you used to, and we are not interested. So, in
12:55
Speaker 2: my opinion, it's opposite market signals that are being sent.
12:59
Speaker 2: And this is where you get in the problem. In
13:00
Speaker 2: both of these cases, then with the US government owning them,
13:04
Speaker 2: is okay, do you actually get accurate market signals? If Intel,
13:09
Speaker 2: quite honestly, if they should be out of business, but
13:12
Speaker 2: they're kept afloat by the US just because we can't
13:15
Speaker 2: figure out any other way to do this. That's not
13:19
Speaker 2: really how the United States works. We generally let bad
13:23
Speaker 2: businesses die, or we should, and you have new ones
13:27
Speaker 2: that are better that spring up to take their place. Intel,
13:30
Speaker 2: by the way, is an example of that. They all
13:34
Speaker 2: the company making freaking vacuum tubes and you know, all
13:37
Speaker 2: the big you know computers back in the sixties. Intel
13:40
Speaker 2: came along and said, We've got a better way to
13:42
Speaker 2: do this. And their competitors didn't run to the US
13:44
Speaker 2: government and say, oh, please, please, please give us money
13:47
Speaker 2: so we can stay. No leg that they had to
13:49
Speaker 2: deal with that because they were selected against by the market.
13:53
Speaker 2: And so if Intel's being selected against by the market,
13:56
Speaker 2: which is what's been happening, right, why do we save them?
13:59
Speaker 3: Why?
14:00
Speaker 2: Quite honestly, why don't we If you want to use,
14:03
Speaker 2: like US taxpayer money, use it for the stuff that's
14:05
Speaker 2: being selected for.
14:06
Speaker 3: By the market. You know.
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Speaker 4: Yeah, Like, I think there's a very compelling argument that
14:12
Speaker 4: the state of chip manufacturing in the globe right now,
14:16
Speaker 4: and the risk of all of it being done or
14:19
Speaker 4: a critical a critical portion of it being done in
14:23
Speaker 4: Taiwan is a national security concern and could you you
14:27
Speaker 4: could get full stuff. We could both absolutely envision a
14:30
Speaker 4: scenario where we are facing the exact same scenario as
14:35
Speaker 4: we did with rarers.
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Speaker 2: Right, you need to produce this stuff here in the
14:40
Speaker 2: US full stop. The question is do you need to
14:43
Speaker 2: have federal ownership of Intel the way to do that?
14:46
Speaker 2: Because let's say that Intel, Intel's been producing sucky products
14:50
Speaker 2: for a decade. Yea, it's how they got to where
14:52
Speaker 2: they are where they needed this. Like there's a reason
14:55
Speaker 2: why there's a reason why AMD isn't showing up being like, oh,
14:59
Speaker 2: please take our equity, or Nvidia's not showing up saying
15:02
Speaker 2: please take our equity. It's because they they don't need that.
15:08
Speaker 2: If Intel continues to produce suck over the next ten years,
15:12
Speaker 2: now that the US government owns a ten percent stake,
15:15
Speaker 2: do we just throw more money at the suck because
15:17
Speaker 2: we don't want to lose the equity state?
15:19
Speaker 1: Right?
15:19
Speaker 2: I don't know, Like these are the questions that come
15:22
Speaker 2: up on this is like, I gotta tell you what.
15:27
Speaker 2: Once you have you know, the federal government basically committing
15:30
Speaker 2: to hey, we're going to fund Intel, and you know,
15:32
Speaker 2: all those jobs generally Congress doesn't like to cut jobs
15:36
Speaker 2: from federal allocations. That's how it usually works. So these
15:41
Speaker 2: are the questions that come up here. And the other thing. Look,
15:47
Speaker 2: you might say, look, I think the president can do
15:49
Speaker 2: a great job, you know in this partnership with Intel. Okay,
15:52
Speaker 2: play out the string. Let's go five ten years down
15:55
Speaker 2: the road.
15:55
Speaker 3: Right.
15:55
Speaker 4: Do you think, let's say that president will be as
15:57
Speaker 4: good as steward of Intel's company as the current one.
16:00
Speaker 2: If if Bernie Sanders Junior is running the United States government,
16:04
Speaker 2: are you gonna be like, yes, this is what I want?
16:07
Speaker 3: Right? You know, this isn't a Donald Trump steak.
16:11
Speaker 4: This is a US government stake, and typically they don't
16:16
Speaker 4: just go away.
16:16
Speaker 3: No. And there's a.
16:18
Speaker 2: Reason why the US is historically shied away from stuff
16:21
Speaker 2: like this. Yeah, and it's because it hasn't really worked
16:26
Speaker 2: in the places that have tried it.
16:29
Speaker 4: Again, I don't I don't want to paint this as
16:32
Speaker 4: a full complete in total one to eighty. The US
16:35
Speaker 4: government has on many occasions made bets on companies, not
16:41
Speaker 4: through ownership stakes, but on bills supporting specific industries and
16:44
Speaker 4: specific companies. There's been successes, there has, but there's been failures.
16:46
Speaker 3: There.
16:47
Speaker 4: So this is an extension in a in a pretty
16:51
Speaker 4: broad extension of it, but it just it leads to
16:55
Speaker 4: a whole bunch of other questions. The biggest one to
16:59
Speaker 4: me is, is something we're going to expand upon? It
17:02
Speaker 4: sounds like it, right, It sounds like has made statements
17:05
Speaker 4: that he wants to expand this further, and so is Yeah,
17:11
Speaker 4: I think it's a real question as to whether or
17:13
Speaker 4: not this is how we want us taxpayer dollars going
17:17
Speaker 4: is towards ownership in publicly traded companies, and specifically ownership.
17:23
Speaker 4: What I further wonder is is it's specifically going towards
17:25
Speaker 4: ownership and public companies that have not done very well
17:29
Speaker 4: right that we see a strategic national interests Sure, I want.
17:33
Speaker 2: To talk about a piece from Bloomberg that just popped
17:35
Speaker 2: up on my screen today. And look, there's a few
17:40
Speaker 2: other things that we're going to get to here, but
17:42
Speaker 2: there's one that just popped up and everyone's talking about it.
17:46
Speaker 2: It's about how there are now more ETFs than there
17:49
Speaker 2: are individual stocks in the United States. And you get
17:53
Speaker 2: the people freaking out, being like, oh my goodness, this
17:55
Speaker 2: is horrible, not even realizing, hey, there have been more
17:58
Speaker 2: mutual funds than there are stocks in the US US
18:00
Speaker 2: for years now, and ultimately I think that the comparison
18:05
Speaker 2: that I've found online that's best is Wow, I guess
18:08
Speaker 2: we just found out that there are more recipes than
18:10
Speaker 2: there are ingredients in the world.
18:13
Speaker 3: You know, Yes, this isn't a big deal at all. No,
18:15
Speaker 3: it's not.
18:16
Speaker 2: And someone you know made the case, Oh, it's so
18:18
Speaker 2: hard to like choose a fun now, there's so many choices,
18:21
Speaker 2: And to that I say, Okay, well, you have to
18:24
Speaker 2: figure out what you're trying to do. Like, if you're
18:27
Speaker 2: trying to make a fish dish on a Tuesday, don't
18:30
Speaker 2: flip to you know, the poultry section and start looking
18:33
Speaker 2: through there. Don't just you know, go through the you know,
18:36
Speaker 2: you gotta find Okay, here's the fish section of the cookbook,
18:39
Speaker 2: and I'm gonna go through and narrow down from there
18:42
Speaker 2: and do the work. The great thing about having more
18:44
Speaker 2: tools is you can build a portfolio that's more built
18:47
Speaker 2: to your specific needs. The downside, it might take you
18:50
Speaker 2: a little longer to find what you're doing.
18:52
Speaker 4: But and might there be some terrible recipes in that
18:55
Speaker 4: book that cambine fish and cheese.
18:57
Speaker 3: Yeah?
18:58
Speaker 2: Uh, disagree, I will make you the most delicious blue
19:03
Speaker 2: cheese muscles you've ever had in your life.
19:04
Speaker 3: My man, I'm telling you, but that's for another day.
19:09
Speaker 3: Let's take a quick break.
19:11
Speaker 2: When we return, we've got the Trivia Answer and Wall Street.
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Speaker 5: After a fit fuel rally on Friday, markets beginning the
19:41
Speaker 5: week mostly quiet, as Wall Street away's pivotal Nvidia earnings
19:45
Speaker 5: Wednesday after the Clothes in addition to an inflation reading
19:49
Speaker 5: on Friday. With the Core PCE index right now, the
19:54
Speaker 5: Dow is off by about a half a percent, or
19:56
Speaker 5: two hundred and thirteen points, SMP five hundred dipping by
20:00
Speaker 5: only four points, Nasdaq is up by three tenths of
20:04
Speaker 5: one percent or sixty two points, Hire Russell two thousands
20:06
Speaker 5: off by four tenths of one percent, Tenure treasureealed up
20:10
Speaker 5: two basis points now at four point two eight three percent,
20:15
Speaker 5: and crude oil up over one and a half percent higher,
20:18
Speaker 5: trading at sixty four dollars and sixty six cents a
20:21
Speaker 5: barrel breaking news this hour after Elon Musk accused Apple
20:25
Speaker 5: and Open Ai in a lawsuit of unfairly favoring the
20:30
Speaker 5: Ai app across iPhones and thwarting competition for other chat
20:34
Speaker 5: bought makers. Apple stock is up modestly. Meanwhile, Cured Doctor
20:38
Speaker 5: Pepper agreed to purchase the owner of Pete's Coffee JdE
20:42
Speaker 5: Pete's for eighteen billion dollars. Once the acquisition completes, the
20:47
Speaker 5: combined company is set to separate into two independent US
20:51
Speaker 5: listed coffee and beverage firms. Shares in Cured Doctor Pepper
20:55
Speaker 5: sinking nearly eight percent, Wellje JdE Pete stock is jumping
21:01
Speaker 5: sixteen percent. Elsewhere, Intel stock up over one percent on
21:05
Speaker 5: the heels of confirmation that the US government has taken
21:08
Speaker 5: a ten percent stake in the struggling chip maker. Elsewhere,
21:11
Speaker 5: furniture stocks taking ahead following comments from President Trump that
21:15
Speaker 5: his administration would launch an investigation into imported units. Williams
21:20
Speaker 5: Sonoma down over two percent, while rh and Wayfair tumbling
21:24
Speaker 5: by about six percent, and shares in American Eagle Outfairders
21:28
Speaker 5: pulling back two percent after Bank of America downgraded the
21:32
Speaker 5: stock to underperform. The Bank's analysts noted that while the
21:36
Speaker 5: retailer's Sidney Sweeney ad campaign may boost sales near term,
21:40
Speaker 5: the momentum will be sapped by tariffs. I'm Tucker Silva
21:45
Speaker 5: and that is Wall Street Watch. And in the previous segment,
21:47
Speaker 5: we asked you the trivia question which member of the
21:50
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21:54
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21:57
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22:16
Speaker 2: All right, so, the Center for Retirement Research at Boston
22:20
Speaker 2: College says that the average man retires at age sixty four,
22:26
Speaker 2: while the average woman retires at age sixty two. This
22:30
Speaker 2: despite a recent report from Empower, who polled about a
22:35
Speaker 2: thousand adults who said, Hey, we'd like to retire at
22:39
Speaker 2: age fifty eight. That's the ideal age for retirement, quite
22:43
Speaker 2: honestly missing by anywhere from like four to six years.
22:46
Speaker 2: I don't see as being that bad like that.
22:48
Speaker 3: That's pretty good.
22:49
Speaker 2: Actually, if you're retiring, you know, within four years of
22:54
Speaker 2: when you say you want to, I think that's pretty
22:57
Speaker 2: darn good quite honestly.
22:58
Speaker 4: Yeah, yeah, that's fair. I'm just trying to get to
23:04
Speaker 4: how right that was the average? So most people that
23:09
Speaker 4: I meet, I would definitely say have very little ability
23:14
Speaker 4: to retire at fifty eight years old. That seems very hot,
23:17
Speaker 4: you know, pine the sky to me.
23:19
Speaker 2: Well, it's interesting because keep in mind, there are a
23:22
Speaker 2: number of professions where you're forced out in your late
23:25
Speaker 2: fifties early sixties, and that contributes to this as well,
23:29
Speaker 2: Like how you get to that average, there's somewhere you're
23:32
Speaker 2: forced out even sooner than that, depending on you know,
23:34
Speaker 2: the specifics of your job and things like that. So
23:38
Speaker 2: I look at this, and what I always come back
23:40
Speaker 2: to is the math that you have to do in
23:42
Speaker 2: order to retire at fifty eight, because let's say that
23:44
Speaker 2: on average, you start working at twenty Some people start,
23:47
Speaker 2: you know, in high school, after high school, in college,
23:49
Speaker 2: but let's say twenty to twenty two.
23:51
Speaker 3: Is when most people start.
23:53
Speaker 2: Sure, if you're going to retire at fifty eight, you're
23:56
Speaker 2: going to do thirty five thirty six years of work.
24:00
Speaker 2: You then, based on current life expectancies, are going to
24:03
Speaker 2: be retired for twenty five to twenty seven years. That's like,
24:08
Speaker 2: that's pretty close to imbalance, which means you need to
24:11
Speaker 2: be saving a lot more than ten to fifteen percent
24:13
Speaker 2: of your income to do so. Even accounting for things
24:16
Speaker 2: like compounding, you probably got to be saving twenty five
24:19
Speaker 2: to thirty five percent of your income for that.
24:21
Speaker 3: To be feasible.
24:24
Speaker 2: Or at the lottery, I listen, you gotta spend money
24:27
Speaker 2: to make money, is what they always say. But I
24:29
Speaker 2: don't think that's what they're talking about.
24:31
Speaker 4: Yeah, you know, this always comes back to something too,
24:33
Speaker 4: which is fifty eight, you got seven years of health
24:38
Speaker 4: insurance to figure out.
24:39
Speaker 3: For most people, again, you know, you might work.
24:41
Speaker 4: You might work as a line worker for utility company,
24:43
Speaker 4: which case they might have that covered for you because
24:45
Speaker 4: you can't work till sixty five. You might you might
24:47
Speaker 4: work for the training system, in which case, yeah, they
24:50
Speaker 4: probably have that covered for you.
24:51
Speaker 3: Or in the military, et cetera, et cetera.
24:52
Speaker 2: A lot of people working for the train system these days.
24:54
Speaker 4: I don't believe so. But for most of us that
24:58
Speaker 4: work in the private sector, or retiring at fifty eight
25:01
Speaker 4: would mean paying for private health insurance for you and
25:04
Speaker 4: your family for seven.
25:04
Speaker 2: Years, which the going rate these days, depending on you know,
25:08
Speaker 2: exactly what kind of plan that you want. If you're
25:10
Speaker 2: you know, single, you're probably talking anywhere from like seven
25:13
Speaker 2: to fifteen thousand a year. If you're married, you're probably
25:15
Speaker 2: talking fifteen to thirty thousand a year.
25:17
Speaker 3: Yeah, big chunk of change.
25:18
Speaker 4: Yeah, it is huge, huge money, not completely undoable for
25:24
Speaker 4: some people. There are also plans that get subsidized by
25:28
Speaker 4: the federal government that some people can apply for and
25:31
Speaker 4: actually get regardless of net worth. But to Chuck's point,
25:36
Speaker 4: retiring that much before your Medicare age or full Social
25:40
Speaker 4: Security retirement age requires a ton of planning, like way
25:45
Speaker 4: in advance, and trying to do it at fifty two
25:48
Speaker 4: might not be possible.
25:50
Speaker 2: But you got to start planning for that around thirty you.
25:53
Speaker 4: Do, or you have to get really fortunate in terms
25:55
Speaker 4: of your career and the direction that it goes and
25:57
Speaker 4: your ability to save. And maybe you are just that
26:00
Speaker 4: natural saver type. But again, you know, retiring at fifty
26:02
Speaker 4: eight and some times you can't even touch that retirement account.
26:06
Speaker 4: If you are trying to make plans to retire before
26:10
Speaker 4: that full Social Security age of sixty seven or prior
26:13
Speaker 4: to that Medicare age of sixty five, I'm here to
26:16
Speaker 4: tell you need to plan early. If you want somebody
26:20
Speaker 4: to take a look with you at your plan and
26:22
Speaker 4: figure out how to achieve that goal, and then you
26:25
Speaker 4: know back into what sort of lifestyle you're going to
26:27
Speaker 4: have if you do achieve that goal. Give the folks
26:29
Speaker 4: at Armstrong Advisory Group a call. This is the type
26:31
Speaker 4: of stuff that we do every day. The numbers eight
26:34
Speaker 4: hundred three nine three four zero zero one for that
26:38
Speaker 4: consultation from the Armstrong Advisory Group once again eight hundred
26:41
Speaker 4: three nine three four zero zero one.
26:44
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
26:46
Speaker 1: registered investment advisor. Nothing in the ad or in any
26:49
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
26:52
Speaker 1: your own financial tax into state planning advisors before making
26:55
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
26:58
Speaker 1: advisory services.
27:00
Speaker 3: Piece and CNBC.
27:01
Speaker 2: That has one of my least favorite words that's made
27:03
Speaker 2: its way into the English language. Autogiants forced to confront
27:07
Speaker 2: some hard truths in the age of poly crisis poly
27:13
Speaker 2: meaning many crisis meaning crisis. And look, if we're gonna
27:20
Speaker 2: just use that term quite honest, like recession, it's worse
27:24
Speaker 2: than that because you can always claim that like, oh,
27:26
Speaker 2: this is a crisis and that no. Like when you
27:30
Speaker 2: get into the auto business, the hard truth that you
27:33
Speaker 2: have to accept is that the business that you've chosen sucks,
27:40
Speaker 2: at least to operate it. You can make some cool cars,
27:43
Speaker 2: you can have some fun doing it, but ultimately you
27:46
Speaker 2: are going to spend billions of dollars in capex trying
27:50
Speaker 2: to eke out you know, a few margin points here
27:53
Speaker 2: and there, and it's always hard, and then recession hits
27:57
Speaker 2: and it gets harder.
27:58
Speaker 4: So let me ask you this question, then, do you
28:00
Speaker 4: believe that automakers are facing a uniquely large set of
28:04
Speaker 4: obstacles today compared to other times in the last two decades?
28:08
Speaker 3: Yes, but it's of their own making.
28:13
Speaker 2: What I mean by that is that if you look
28:16
Speaker 2: at how automakers have decided to survive in the last
28:20
Speaker 2: couple of decades, it's by building bigger cars and trying
28:23
Speaker 2: to get more margin out of those vehicles, hence the
28:26
Speaker 2: move over to SUVs, which, by the way, like we love,
28:28
Speaker 2: I drive kind of a semi suv, Like I'm a
28:32
Speaker 2: super outback guy myself, so you know, it's not really
28:35
Speaker 2: an suv, and I'm just cool enough to be able
28:37
Speaker 2: to drive it, so that's nice. Love the functionality of SUVs,
28:41
Speaker 2: like they're great, I fully understand it. But ultimately there's
28:45
Speaker 2: also a lot more stuff that goes into them, and
28:48
Speaker 2: that makes them more expensive to sell, which is why
28:51
Speaker 2: car makers like to sell them. But when the price
28:54
Speaker 2: of those inputs goes up, it becomes harder to maintain
28:57
Speaker 2: your cost structure. And so rather than saying, hey, costs
29:02
Speaker 2: are going up, we need to start making smaller and
29:05
Speaker 2: cheaper cars in order to deal with this and be
29:07
Speaker 2: able to sell more cars to more people, the answer
29:10
Speaker 2: has been no, we're gonna move in the opposite direction.
29:13
Speaker 2: This suv now has a third row that's only fit
29:15
Speaker 2: for people age you know, three and under because there's
29:18
Speaker 2: no leg room. But hey, like we've we've got to,
29:21
Speaker 2: you know, sell the third row is you know, some
29:23
Speaker 2: kind of functionality. Mike's laughing at me because during the
29:25
Speaker 2: break I was talking about, like do I need a
29:27
Speaker 2: third row in like you knowe my future.
29:31
Speaker 4: So so I agree that that piece was a crisis
29:34
Speaker 4: of their own making. I also would agree that the
29:37
Speaker 4: transition that all these automakers are needing to do seemingly
29:40
Speaker 4: because of political pressure from one direction of we're all
29:43
Speaker 4: making evs to now we're all only making gas powered vehicles,
29:47
Speaker 4: that is also a crisis of their own right.
29:48
Speaker 2: Toyota and they were fine. Toyota's like, no, we're not
29:51
Speaker 2: gonna like respond to like what we think is a fad,
29:54
Speaker 2: and they were completely right in doing so.
29:56
Speaker 3: Other pieces u.
30:00
Speaker 4: 's seeming subsidization of their auto industry and intentional dumping
30:04
Speaker 4: of cars onto other markets, as well as tariff policy.
30:07
Speaker 2: Automakers did that to themselves too, specifically the Germans. They
30:13
Speaker 2: have not resisted. The people have been warning the Germans
30:16
Speaker 2: for years about what was coming, and they said, nor
30:19
Speaker 2: bring over the Chinese. EV's fine, and they're putting their
30:22
Speaker 2: own industry out of business.
30:24
Speaker 3: And doing so.
30:25
Speaker 4: And the only reason to drive that point a little
30:29
Speaker 4: bit further, the only reason that those Chinese automakers have
30:34
Speaker 4: been able to modernize to the extent that they have
30:37
Speaker 4: been able to is because every foreign automaker in the
30:40
Speaker 4: world said yeah, let's go into China and we'll share
30:43
Speaker 4: our IP with the Chinese government. Correct, So okay. I
30:48
Speaker 4: was hesitant to agree at first, but I would agree.
30:51
Speaker 4: Crisis of their own making, but we will if it
30:56
Speaker 4: gets bad enough, end up bailing them out because they're
30:58
Speaker 4: a national security concern. So will the Germans, so all
31:03
Speaker 4: the French, so will every other country that supplies an
31:06
Speaker 4: automaker in there.
31:07
Speaker 2: Do you think, let me ask you this for real, though,
31:11
Speaker 2: do you think there's appetite for auto bailouts if it
31:13
Speaker 2: came to that at this.
31:14
Speaker 4: Point, Regardless of the appetite, I think it was.
31:20
Speaker 3: Yes, do you think it would happen?
31:21
Speaker 4: I think there would be political appetite for an autobail
31:24
Speaker 4: out if it happened.
31:25
Speaker 2: Interesting, let's take a quick break. When we come back,
31:29
Speaker 2: it's time for stack root nets.
31:31
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31:54
Speaker 5: This segment of the financial exchange brought to you bar
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Speaker 5: by the US Virgin Islands Department of Tour. There is
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32:26
Speaker 2: Mike, what do you got for me for stack Roulette?
32:28
Speaker 3: Sleepovers? Is what I have for you for stack Roulette.
32:31
Speaker 4: The Journal has a piece today about well they start
32:33
Speaker 4: off with a eleven thousand square foot in Newport Coast,
32:37
Speaker 4: California estate valued at sixty million dollars in a case
32:41
Speaker 4: where it went for sale and they reached an agreement
32:44
Speaker 4: to allow the potential buyers to rent it out for a.
32:47
Speaker 3: Couple months time.
32:49
Speaker 4: Not enough is the answer, and so at first I
32:53
Speaker 4: read this as completely irrelevant to ninety nine point nine
32:56
Speaker 4: percent of Americans. But they actually went into a few
32:58
Speaker 4: cases where even on a half a million dollar home
33:01
Speaker 4: that was for sale in Texas and elsewhere where. The seller,
33:06
Speaker 4: probably in some places where there is immense pressure to
33:09
Speaker 4: sell homes right now and not a whole lot of
33:11
Speaker 4: buyers for them, allowed for the potential buyer to come
33:15
Speaker 4: in and move in for a weekend and get a
33:18
Speaker 4: feel for the home, try out the ac try out
33:20
Speaker 4: the plumbing, and really get a sense for actually living there,
33:23
Speaker 4: which I find.
33:25
Speaker 3: Interesting.
33:27
Speaker 4: I would absolutely want this as the buyer of a
33:29
Speaker 4: potential property. I would absolutely be terrified about it as
33:32
Speaker 4: the potential seller of a property. And my guess my
33:37
Speaker 4: concerns about it, and my guess is that it's not
33:39
Speaker 4: going to be done properly, and there's going to be
33:41
Speaker 4: instances popping up of homes that get damaged during a
33:45
Speaker 4: piece of time like this, and is there contractually anything
33:48
Speaker 4: set up for that squatters that end up moving in
33:51
Speaker 4: without any potential actual ability to buy the property. But
33:54
Speaker 4: I do just find it interesting and it's not something
33:57
Speaker 4: it's not something you see in a seller's market, let's
33:59
Speaker 4: put it that way.
34:00
Speaker 2: No, exactly, Like the the only way that you can
34:03
Speaker 2: do this is if you're the only person requesting it,
34:05
Speaker 2: right you know you you're not going to as a
34:08
Speaker 2: seller be like, Okay, Jimmy, you get Monday. Yeah, Carol,
34:13
Speaker 2: you've got Tuesday, and I need all bids in by
34:16
Speaker 2: the end of the week.
34:17
Speaker 3: You know, it's you're not going to clean the sheets every.
34:21
Speaker 2: Night, you know, for a week.
34:22
Speaker 3: Yeah.
34:23
Speaker 4: And it's one thing when it's a sixty million dollar
34:24
Speaker 4: property and uh, you know the buyer has potential to
34:28
Speaker 4: lay down a quarter million dollars a month in rent.
34:31
Speaker 1: Uh.
34:33
Speaker 3: Yeah, that's a different saying. I'm talking about.
34:36
Speaker 4: You know, the apartment in Summerville that's for sale, and
34:39
Speaker 4: do you let that person spend the night in it
34:41
Speaker 4: to get a feel for the neighborhood.
34:43
Speaker 2: So here's the thing I don't think, as either a
34:48
Speaker 2: buyer or seller, I like the idea of staying in
34:51
Speaker 2: a home beforehand.
34:53
Speaker 3: No, I give it.
34:55
Speaker 4: Give it I get from the seller perspective, Give it
34:56
Speaker 4: to me from the buyer's perspective.
34:59
Speaker 2: You can change an in a house. You don't like
35:01
Speaker 2: the bed in that room, move it there. You don't
35:03
Speaker 2: like how the living room's arranged, Fine, like you're gonna
35:05
Speaker 2: change it anyways.
35:06
Speaker 3: Yeah.
35:07
Speaker 2: Ultimately, what I do think every prospective buyer should do is,
35:12
Speaker 2: if you're really serious about putting an offer in spend
35:15
Speaker 2: a full day in that neighborhood before you do so.
35:18
Speaker 2: I'll give you an example. I was looking at a
35:21
Speaker 2: place several years ago and I was like, Wow, this
35:25
Speaker 2: is this is amazing, this is this is great. We've
35:27
Speaker 2: been there for like twenty minutes. As we got towards,
35:31
Speaker 2: you know, the end of our tour around, all of
35:34
Speaker 2: a sudden start hearing some airplanes from inside the house
35:38
Speaker 2: pretty loudly, and I'm like, what's going on here? I
35:41
Speaker 2: go outside and for the next twenty minutes or so,
35:45
Speaker 2: there is a parade of US military cargo aircraft coming
35:50
Speaker 2: through the airspace about two thousand feet overhead.
35:52
Speaker 3: Uh huh yeah, And as you.
35:54
Speaker 2: Know, like military aircraft are a little bit louder than
35:57
Speaker 2: their civilian counterparts.
35:58
Speaker 3: Yeah, this is.
36:00
Speaker 2: A nice place, but I don't think this is where
36:01
Speaker 2: we want to be. And I'm I love planes. I mean, look,
36:04
Speaker 2: if I can't get on board with this, like, no
36:08
Speaker 2: one's going to because ultimately I could be playing with
36:11
Speaker 2: I love watching planes, but I also like to be
36:15
Speaker 2: able to have control over when I do so, and
36:17
Speaker 2: every day from the backyard is just not what I wanted.
36:22
Speaker 2: Had I not spent a little bit more time there.
36:24
Speaker 2: I wouldn't have realized that other things, Hey, is there
36:28
Speaker 2: a lot of traffic that picks up at a certain
36:30
Speaker 2: times and this is more in cities. I had someone
36:33
Speaker 2: I was talking to just the other day who was
36:36
Speaker 2: really close to putting an offer in at one point
36:39
Speaker 2: on a place in Boston, and it happened to be
36:42
Speaker 2: right near Fenway Park and just by, like a stroke
36:45
Speaker 2: of luck, as they were about to do this, they
36:47
Speaker 2: had to drive through at like five pm one day
36:50
Speaker 2: and they were like, I'm not going to be able
36:52
Speaker 2: to get home eighty one times a year because the
36:54
Speaker 2: Red Sox are playing.
36:55
Speaker 3: Yea, they decided not to. So remember the movie with
37:00
Speaker 3: Morgan Freeman Bradt What's in the Box? Uh? Yeah, So
37:04
Speaker 3: that movie.
37:05
Speaker 4: They move into an apartment and they mentioned in the
37:07
Speaker 4: movie that the realtor would only bring them by for
37:10
Speaker 4: like fifteen minute visits because there was a train that
37:13
Speaker 4: went right by the door and shook the entire apartment
37:16
Speaker 4: for a day.
37:16
Speaker 2: So I think you should spend a full day just
37:18
Speaker 2: so you get a sense of like what happens around
37:21
Speaker 2: the place during that day. Do you need to sleep
37:24
Speaker 2: in the house, No, Like, I'll be honest. The first
37:27
Speaker 2: time I've ever moved to any new place, the first
37:29
Speaker 2: night sucked. You're uncomfortable, You're like, where am I?
37:31
Speaker 3: Why am I here? What am I doing?
37:33
Speaker 2: I've never had a good first night in a house,
37:36
Speaker 2: so maybe that's just me, but uh. In any case,
37:40
Speaker 2: spend some time around what you're considering buying sleepovers eh
37:45
Speaker 2: not for me?
37:46
Speaker 3: Quick break for the entire rest of the day.
37:48
Speaker 2: We'll see you tomorrow.