TRANSCRIPT
good morning sense of things audience we’re glad to have you guys here again once again we’ve got
some fun things to talk about we’ll also have uh some economic indicators that Ron’s going to
share with us and a little bit about the markets Ron how you doing brother good morning no good
morning doing got a political Seasons Heating up so get your popcorn out or get your vomit bucket
out I’m not sure which one vomit bucket or either that or your noos so much has been made of this
this upcoming presidential debate my my theory is it’s going to be because my theory is that one
side the president is going to be not as exciting as he is everybody thinks he’s going to be and I
think the former president is going to be muted so I think it’s going to be like watching slugs
call across the ground so well my my my two thoughts are number one you’re not going to
learn anything nope number and number two they’re not supposed to be exciting debates yeah they’re
not supposed to be fireworks yes you’re supposed to learn you’re supposed to learn how would you
handle this situation yes what would your solution be I go back to boring let’s learn something not
gonna happen it’s not going to happen and once again CNN has made such a big deal about this
I’ve seen it countdown clock yeah every yeah countdown clocks and all the fox is gonna have
a simoc cast and all this stuff and it’s gonna be boring so every you’re You’re Gonna Learn nothing
as Ron said and it’s just not going to be exciting I’ve never watched a presidential debate because
they bore the living tears out of me and nothing is ever it’s just a bunch of gobbly goop in most
cases gobbly goo’s a good word or maybe that’s two words I’m not sure you’ve got some fun stuff to
talk about I’m assuming I absolutely do all right let’s see here we go all right you see my screen I
do Wizard of Oz 1939 movie The Horse of the iconic horse of different color was used creating jello
jello I didn’t even know I I knew Jello has been around for a while I didn’t know it was back I
didn’t know it went all the way back to then yeah that’s crazy yeah so it was they did they coated
the horse with Jello C and jell crystals but here’s the funny thing Buddy Epson was
the original Tin Man yep and they used to spray literally silver on him so that to a point where
he inhaled it into his lungs got sick and he was taken off the he couldn’t perform for the movie
probably the last two last generation doesn’t remember that story but yeah so you want to
talk about back 1939 what they were trying to do for special effects and makeup yeah and didn’t
didn’t the Cowardly line it was like it caused him all kinds of the stuff that they put on him
or the glue that they put on him to get the the stuff on I think he broke out from that too so
these poor guys are like just getting destroyed and then and then of course Judy Garland who the
hell knows how any of this affected her she she certainly went went South pretty quick
within a few years did did not last too long no all right next one Burger King introduced
wine in 1915 I was unaware of this and then you read it right it was called the soall Whopper
wine they were pairing wine with Whoppers but it was only in Spain that they tried this out
because they did some ridiculous marketing study that people in Spain loved wine with their meal
so in order to draw them into Burger King wow for dinner they they wanted to sample and pair of wine
with your Whopper it’s what goes well with a Whopper what goes well with a whatever their
version of a mcfish is I don’t know it’s this goes with a good white Spanish wine this goes
with a good tempero and I’m thinking of a p p Noir with my Oreo cookies tonight well that’s probably
true it’s maybe they’re good for dunking but as we talked about in the previous podcast the Oreos
are smaller now so you got to eat more of them yeah you just got to put your fingers a little
further into the glass that’s all and here this was interesting because I was born about 18 years
too late because all my favorite music was from 65 to 71 me too Led Zeppelin turned down Woodstock to
avoid being typ cast typ cast is what and here’s the crazy thing they were only they’d only just
formed as a band I think the year before really because remember they came out of The Yardbirds
so they were only out there for a year and they were afraid of being tip cast yeah I’m like yeah
this is the biggest stage on the nobody knew it was going to be as big as it was it was some of
the most was some of the biggest stars of their time yeah I thought it was fun and interesting
but hilarious ridiculous anyway I got to go back so our Market has been at ridiculous
levels and you and I put together our forecast in the beginning of the year I think this might have
been in December early January yeah and here we are we’re already well past all of it yeah
I still think we’re going to end up in the 4900 to 5100 range it all depends on how deep of a pothole
we step in prior to the election I believe we’re going to be higher after the election but I just
cannot see unless there’s a clear winner going into the election I’m talking about five to six
or more points ahead I can’t see how with the market won’t get thrown around yeah and get a
pullback which will be a great time to get back in to buy the dip what are your thoughts oh no I
agree and I could have never thought that it’s as high as it is today it’s just been a ridiculous
year and it’s one of those ones as a and I’m sure you feel the same way as a money manager
you’re just like okay I I just I’m waiting for the shoe to fall and you have your hand on the
trigger finger or you have your trigger finger on the the trigger but I just at at this point I’m
like I can’t not be involved in this and be part of that ride but we’re just going to have to be
fast about shifting gears if it decides to move the other way pretty quick and and I don’t know
the trigger is here’s the conundrum I have people that are one to three years away from retirement
yep so as you get closer to retirement you drisk but then they’re saying I’m also missing some of
the upside here yeah and the whole thing is like we don’t know we’re going to wake up tomorrow and
another October 7th will happen yep who knows not wishing for any of that but the whole goal
is to be a risk manager and the idea is okay you’re missing some of the upside but we get
a five or 10 pull five or 10% pullback in the next two months you’re protected yeah right you’re not
you’re either you’re protected or you’re not going to see that much of a pullback it’s definitely a
conundrum and had some tough conversations with clients but many of them are just scared crapless
about what’s going on out there and they have been for 12 to 18 months yeah yeah once again
it’s just it’s I just don’t know what the answer is the answer for me is I watch this like a hawk
every day and it just keeps rolling rolling we had that minor little pullback throughout April and
early may pull back towards the end of May but Off to the Races again here in June and we’re going
into the summer months which it’s anybody’s game you know the volume goes down so the the magnitude
can be up or down either direction and if if the volumes down and all of a sudden the senic slides
to we’re concerned about the market it’s anybody’s game on what can happen during that time period so
AG we just have to be prepared and we’re getting pretty far away from the 50-day moving average
at this point so I I think there’s that chance of seeing things work their way downward again during
the summer months absolutely absolutely so I got two economic indicators one we covered in our last
podcast which was the pce and and this isn’t just going back 5 10 or 15 years or even to the doc
com this is going back 45 46 years and we’ve never seen the depth of the negativity with the 10-year
yield and the thre Monon this is a lot of look I we we’ve talked about the two and 10 the two-year
being higher than the 10year the FED looks at the three Monon over the 10 year and I everybody
talks about the consumer and this spending and everything else but realistically credit
conditions have tightened y so unless we get some type of a flush out or a reset so the Fed rate
could come down 50% in the next 18 to 24 months I don’t see where the next Bull push in the economy
is going to be because what they say 60 70% of the profits of the entire S&P 500 is from five or six
stocks yeah so how are we going to get that next push up if it’s not going to be broad-based and
I think a lot of it has to do with the interest rates and the credit tightening yeah it’s just
compan those few company you know I think largely because of AI they’re major players in the AI
world right now so they’re or or they have some AI component and that’s what just keeps pushing them
so people just put aside logic and they just look at this is the next push in the economy but yeah
it’s not been broad-based and it really has not been broad-based for the last two or three years
and there’s one or two ways that could happen it could be that those now probably five stocks pull
back and they become less important and that money scatters out a little bit more to the broad base
or they’re the last ones to fall and it pulls the market down so I don’t know what the answer
to that is you know I think the most important thing is keeping an eye on it and making sure
that you risk manage however you risk manage whether it’s through asset allocation whether
it’s through trading whatever it is you want to be aware of that and you want to be able to make
those adjustments when you need to yep so now we got to follow the most important indicator
it’s not the underwear indicator damn it it’s the lipstick recession indicator oh Jesus so
this is monitoring sentiment in lipstick sales okay and uh right now it’s almost
like sentiment from excellent good only fair to poor and things are trending down okay so lip
lipstick sales are down I have no idea what this means or why this means this but I understand the
underwear sales the lipstick sales I’m not sure as far as an indicator yeah guys don’t
replace underwear that often but women have to replace lipsticks hopefully they’re washing it
yeah that’s true and and hopefully if you’re going to donate it you washed it before you donated it
but you throw those skibbies out that’s what you do all right so then we have an investment idea I
thought this was interesting solar’s been around forever certainly in the last 15 to 20 years it’s
it’s certainly grown I know you were involved in a solar industry solar business for a while
and I thought this was interesting because in a correlation with AI and data warehouse power I
think you’re going to see a lot more of these data centers if they don’t have them already
having a complete Bank of solar panels on their roofs and their property to just help combat the
skyrocketing price of a power and utilities and I will say this I’m talking industry specific I
could not tell you what a Solar Company would be a winner here I have no idea maybe you have
a better idea no ETF maybe yeah I mean the funny part is and I was actually just going through this
as an investment theme did some research and I’m like they all I mean can’t find a one that
makes me excited at this point they’ve all been on this kind of gradual downtrend and I’ve not seen
anything the problem with solar companies is they rely so much on subsidies yes and Subs subsidies
are you just don’t have any control over it in the in the Solar business yeah you get subsidies
in the form of a tax credit for an individual and for businesses but that only lives for one year
and you’re going and going and they can change the subsidies those can go down over time there’s
just an immense amount of changes that happen and that’s really the only reason solar gets sold in a
lot of cases now I will tell you I I added solar to my home the good part is we’re going into the
hot months of the year and I know exactly what my bill is going to be every month I it my it will go
up slightly because we just can’t produce enough power on my roof I could add double the solar
panels and in peak times of usage we just can’t keep up and it drains the battery down and it’s
pulling from the Grid at that point but my bill will not be over 150 bucks during the summer wow
I’m surprised it was even then I have my solar bill which is consistent every single month so
when everybody’s talked about this increase when in electric costs and all that electric costs over
the last 3 years are up 25% and they’re getting higher this summer I know pretty much I’m going to
be in a a pretty tight range when it comes to that so that’s that was the reason I did it I didn’t do
it as a mathematical calculation of when it would get paid back and all that I did it as you know
what I want to be able to know that I’m going to be consistent from that perspective and the
problem is the the cost of Bing solar panels the materials are still so expensive and I was going
to bring up subsidies if you didn’t bring it up because without those subsidies it’s a lot tougher
to justify the cost yeah it was funny because my dad was involved in the Solar industry in the 7s
and that’s what killed the solar industry in the 70s they were massively subsidizing all this and
then all of a sudden they shut that down and boom the solar industry went away and it really didn’t
come back again for another 30 to 40 yeah about 30 years it started and even today I could have said
it 20 years ago the prices got to get cut half yep we live in two we live in two states where the sun
is out most of the year and it’s pretty hot but if they could cut it in half without subsidies I
think you could see I don’t know what percentage of houses have it or apartment complexes whatever
but it should be should approach 50% if it makes it worthwhile I don’t know what that does for
margins and if you can attract the right talent but at some point we’ll get there at some point
we’ll get there but I just thought that was interesting I think it’s a solution but it’s
not the the the people that are all about the the planet and everything else the only solution is
solar and wind and I drove through West Texas God awful ugly country to begin with and it’s now even
uglier with all these windmills out there and the funny thing is we’re going through there and it’s
20 25 M per hour winds it was somewhat windy day and half of them are shut down because they can’t
run them when you get upwards of 30 m per hour wind so it’s what’s the point I don’t understand
that because I actually sat on a plane with a guy that was very big in the wind turbine industry and
he said in order to make a windmill worthwhile there has to be at least an eight or a nine M
hour per wind you’d figure 30 you’d have plenty of energy being generated there there’s a limit
to how fast they can turn at that point and so then it puts a lot of stress on them so they only
turn at a a certain amount of revolutions per per minute and just jamming more wind in there doesn’t
help so then they end up shut from down and it’s okay all right so you’ve put multi-billions of
dollars into these things and just because it’s windy it’s the west Texas Plains it’s flat as
a fraking pancake and there’s always wind out there and okay how often are these things shut
down what’s the deal with it it’s insane and God forbid they are just the most ugly things
I’ve ever seen so I I just can’t even imagine it especially the ones offshore you’re sitting there
at the beach watching these stupid things twisting off the beach and still they’re only producing
about 15% of our power in Texas yeah and there are tons of the damn things I gota so till next
time thanks folks we appreciate you guys coming on hopefully this was something you learned and
we’ll continue to do stuff like this for you we will see you back here the very next time