Germany's Aging Population and Record Social Spending: A Preview of America's Fiscal Future?

This is Invest Talk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host Justin Klein. Good afternoon fellow investor is happy and video day to everybody. There's the big news after hours. This is Invest Talk. This is our threats at the stage here. It's August 26th. And we are here to, as usual, help you become a better investor. Give you some insights what's going on in the markets and how to make smarter decisions with your money. We're here to answer your finance and investment questions. And hopefully by the end of this you will be better prepared for your own situation. Everyone has their own situation that differs slightly, but the fundamentals are the same. And so we're here to instill those fundamentals of smart money management smart investing to you. Now just a bit. We'll talk about today's market activity. But first let's answer this first colleague question now. Hey, just a look. This is a customer calling from New Jersey. I don't know what's your opinion on all dominion freight line. All DFL. Thank you. All right, looking ODFL old dominion freight lines. This is an interesting one because. Historically, it's been a very, very profitable business. High return equity. If you go look at long term returns, it's one of the best performers. I don't say in history, but over the last 20, 30 years, what do they do? They are in the logistics business asset light logistics. They return equity is 25%. Let's use that rising or falling. Yeah, it's been coming down. It was a high of 38% but if you zoom out over 10 years, it's still kind of that. You know, 10 year average. So still very profitable. Good balance sheet free cash about 1.1 billion, but it's been in a downtrend. And I think what you're seeing is that. You know, there's just a correction in the. The Prophometrics. Operating margins have come down a bit. But earning so we have 20% this year, 14% next year. I still generally like it. What I don't like though is that chart. And I think it's one of those names where it was trading it. It kind of had this great reputation. And there was a premium that was built into it. And that premium is slowly bleeding out because I think those margins are compressing a bit. So I would be very patient with it. It is now certainly in a downtrend. And I think there's much more downside potentially to come. I would want to be buying this at a relative discount right now enterprise value is around 21. I still think it's pretty high for a name that doesn't have a lot of growth. You know, it's a 41 billion dollar market cap. It's going to be very it's very cyclical in its business, but it's still a very good business. But I would want to own it back when it's in let's say that the trough was around 16 times enterprise value. You know, if this gets to 150 160 in that range, that's about 200 now. That's probably how to pick up O DFL old dominion freight lines. And we had a great show yesterday was both Luke and myself. We looked into Ray Daly's debt crisis warning in the US heading for fiscal breaking point. So we dug into that kind of both sides. Each argument and we also answered question a question about Costco and many other companies. But Costco is more most important, especially because it's a big fan of Costco. But if you happen to miss that show, it was a great one go check it out. The best way to get every show is to follow best talk wherever you get your podcast. And we have a lot of ground to cover over the next 45 minutes today and time for many will get to all of it. And our main focus point is about Germans aging population. New data came out around how much of their budget is going towards entitlements. And is that a harbinger of things that come here in America? Because from a demographic standpoint, we're a bit behind Europe and Germany. So we're going to look at that. In addition, we are going to touch on leverage ETFs. Regulators have approved them, but the outcome for investors has been horrendous. And then we're going to look at all different types of investments that pray to the worst instinct of the average investor. What's good, what's bad. And what you should avoid like the plague will look at that. We also will answer questions about which sector to invest in and then Lockhe Martin. These are from the Invest Talk Voice Bank. And we also have some questions that came in via the comment section on the Invest Talk YouTube channel. But most importantly will be your live calls. We're going to do a quick break. But please remember you can call anytime and leave your question on the Invest Talk Voice Bank or via. If you're listening via the live stream on InvestTalk.com or possibly until 20th of the area. You can call right now at 8889chart. Up next I'll comment on today's market activity. There are a few things that make KPP financial special. One of them is parallel investing. This means they invest right alongside their clients. Here's how it works. When KPP financial makes a trade for their clients, Justin Klein makes the same trade for himself and KPP on the same day at the same price and same percentage. No front running, no special treatment. Learn more about parallel investing at investtalk.com. 8889chart, 888924278, so I get through and ask your question on today's show. Let's take a quick look at the market today. It was kind of a mixed bag. We closed negative on all the major indices, but only slightly. So really a positive day, which doesn't surprise me considering after the bell we had Nvidia earnings. So far Nvidia's, I think last time I checked, four percent or so. So decent move, but obviously thin volume. So we'll see where kind of that ends up. Usually you get this type of how many fading a little bit as like gamma hedging comes off post earning post earnings announcement. But the point is. So far kind of a muted reaction overall, but it was it means it's not shocking to see the market not moving much going into that earnings. Announcement, the dollar index is a 0.3% on the day. Gold down 0.9% definitely a pullback there. Same with silver down about 1% Bitcoin down 0.6% on the day. WTI crude was down 0.2% what was choppy closed more near session highs than the lows. As the Russia Ukraine talks look to be ending the peace talks and there could be escalation on that front. So there's definitely some worries there. You had July core PCE increase 0.2% and annualize how the 3.3% that's kind of where headline inflation is right now about 3.2% that's up from 3.2% expected. So slightly worse than expected from that standpoint personal spending rose 0.2% which is higher than the 0.1% expectation. But down from June's number of 0.3% personal income up 0.4% better than 0.2 expected as well. So that was on the economic front kind of a mixed bag there higher prices but also higher earnings and higher spending. What else do we get anything else? I think that was about it kind of a bit of a boring day overall. But now let's pivot over to what we're going to go do that we're going to go to a question that came in via our website. Says I mentioned potentially risk in a potentially risky and undervalued gold mining company is sabanya a good investment opportunity. So this one's interesting this is S.B.S.W.S.B.S.W. That is out of South Africa. It's a name it's been around a long time. And it's not just a gold mine I think that's one of the issues here I was the issues one of the things to understand. It would be a good thing could be a bad thing but that it's not a pure play gold mining business. They have some US recycling. Let's see here. They do have they do some processing of different metals, especially battery metals. They mine for once getting more than just gold and silver talking about palladium, roadium, iridium, nickel, chrome, copper, cobalt, etc. So fairly diversified in that sense. So when you when you go and look at this name, yes, they do mine some gold and silver. But that's not really the business alone. It's it's well more diversified. In fact, in fact, palladium and platinum is 53% of the mining gold is only 36%. So really this is more of a platinum and police medium play than a goal play. Once again, not saying that's a bad thing, but you call it and say that that was a goal minor. Well, yeah, but that's a minority of their business. So if I'm playing gold, this would not be the name too, oh, thanks for the call. Let's put it to the best stock voice bank, you know the number, it's 888 99 chart. - Hi, good day, Justin and Luke. This was Matt from Minneapolis calling. I have a question here for you gentlemen. Hopefully you could answer for me and give advice upon. I'm still liquidating, trying to take a profit before I lose everything here from the volatile stock MU hold micron. And I'm considering investing it in one of two things I've been following and noticing are been moving up pretty good. One of them is LMT Lockheed Martin, which has been going up consistently. And with the situation as it is, who knows when the world will come to an end. So we could be building supplies from that company for years, I guess you can just say. And the other company is Charles Schwab. That stock has also been moving up well. Both of them pay decent dividend. Anyways, I was just wondering which of these two looks inviting to you gentlemen. If you give either one of them a thumbs up or maybe put some money at both of them, thank you for listening and look forward to hearing your response on the show. Have a good day. - All right, looking at two different names, like the fact that you're trimming micron at these levels and then looking for alternatives. Now you're looking at two very different companies. Lockheed obviously very tied to the military industry and whether or not we're going to continue to ramp up or are spending obviously near term. As long as this war drags on, we're low in emissions. So companies like Lockheed are going to get some money. And in a long term, I think this, are we going to go from a trillion dollars in spending to 1.5 trillion, like the current administration wants? How does that butt up against our needs for staying solvent and financing those deficits? That's a huge question. And so I do think that there's a huge risk that two, three, four, five years from now, there's a shift in policy around massive military spending. Maybe shifting got more towards drones. That's been a big change within the defense industry as a whole, just seeing not only what Ukraine's doing, but it would even Iran is doing in the straight of our moves by using drone technology to achieve national security goals. Let's just say that. So do you need huge weapons systems, legacy weapons systems that we've had for 30, 40, 50 years? Most likely to some degree, no. And I think over the medium to long term, that could hurt Lockheed along with the death situation. So I don't love Lockheed as an investment. Shwab, very different name. It's a, it's kind of an old agopoly between them, fidelity, e-trade. There's some other brokers out there, those are kind of the big guys. We use Shwab and Fidelity for our clients. We've owned Shwab for a long time. Not just to use them as a broker, but we've owned them for a long time. And it's been pretty big winner in 2024. It was down around 60 bucks, and now we're at 114. So about double in the last two years, it's a great business. And I think it's only going to continue to do better. It's a bit over-bought right now, even though he was down today, but definitely if I'm picking one of the three from Micron, to Shwab, to Lockheed Martin, it's definitely Shwab at the top of the list. Now our 24/7 Invest Talk voice bank never closes. You can leave your question anytime on 8/8/99. Characnor work continues after this break. (upbeat music) It's official. Total lifetime downloads for the Invest Talk podcast are now more than 63 million. Justin Klein is here now taking your calls live. Invest Talk, 8/8/99, chart. (upbeat music) Let's talk about single stock ETFs. They were first approved back in 2022. And that's is when SEC commissioner, Caroline Crenshaw, said, quote, "It would likely be challenging "from the investment professional "to recommend such a product to a retail investor "while also honoring his or her best obligations "or obligation under regulation best interest." Basically saying, if you're an advisor, whether you're a broker, which is still under the best interest guidance, shall we say, regulatory guidance, or you're an advisor like myself who's a fiduciary, either way, it does not make sense for a professional to recommend this to an individual investor, one of their clients. But individual investors can have their way at it. And shockingly enough, it's been bad, very bad. The median single stock ETF has less 38% while paying over $500 million in management fees for these over the last four years. That's crazy. Think about that, the median single stock ETF lost 38%. Most of these are levered, or they are levered, right? Otherwise, you just buy them to link stock. Now they limited it to X. So in practice, well, let's say this, the recommendation is that you use this for trading only intraday. And that can be fine. The problem is that the average investor doesn't use them that way. The median single stock ETF traded 22% of net assets on average over a 30-day period. That's it, only less than a quarter. That means over three quarters of the assets that are in here are held, bought and held throughout that 30-day period. So investors are not using these as daily tactical tools. They're buying and holding them. And over time, the high costs and the volatility decay eats away at returns over time. So there's only been around four, less than four years, but 19% of single stock ETFs have lost over 75%, 19% so one in five have lost over 75%. And 18% have outperformed the actual stock they track, just 18%. Less than one in five. So what's the saying is you would have a much higher odds of performing over the long term if you're gonna invest in a name by just buying the actual company, not the levered ETF. Now for issuers, what are they doing? They're just finding the hottest stocks because they know people want the lottery ticket. They chase returns. And the incentive is to just give as much money in the door as possible. If it fails, well, it doesn't cost them much because they're actually issuing a ton. There's been 518 single stock ETFs over the last four years that were issued. 13 of them have already, 13% excuse me, have already closed, close up shop. The median lost 25%, median, and less just 206 days. So the point here is the numbers do not bear out. These are not, these are weapons of wealth destruction. So you want to stay far away from them. Now, let's swing back to the best stock voice bank for a question that came in earlier. - Hey, Justin Early. This is Daniel from Jacksonville, Florida. Thank you for all the work you all do on the show. It's always a really great listen. I have a question on ticker symbol gold. And I think you referenced this stock before. So I started a specific position in bear at gold over the last couple of months. I was curious, would you look elsewhere or do you think gold specifically ticker symbol gold is still a solid choice? Thank you and I look forward to hearing your answer. - All right, looking at G-O-L-D, which is gold.com. Actually, no, sorry, bear gold, bear gold. So bear gold, yeah, we actually own bear gold. It's ticker symbol used to be G-O-L-D, now it's B. But yeah, it's been rallying. It's a great name. It does have some copper exposure, which I like. Definitely want a little bit of that. But overall, it is, let me see, pull it up on the system, there we go. Let me give you the breakdown. So, let's see, eight, about 9% is copper. 56% is gold or here in the United States. 15% is gold or in Africa. But basically 90% of the business gold, a nice little sprinkle, like I said, about 90% is in copper. So I like that little juice as well. Add the copper aspect, earnings must be up 50% this year, 14% next year to $4.12 is a $47 stock. So 11 times earnings and the company's growing earnings rapidly has pretty minimal debt about $11 billion in net debt on a $77 billion price. market cap. That's fine. Free cash flow is 5.6 billion and obviously rising with copper and gold prices. Trennacley 26%. So yeah, they're gold. Big fan. We own it for clients. Now the next invest talk, we look into this question. Why is the dollar weakening? What multi-month lows mean for your purchasing power? We will break down why the dollars under pressure, who wins, who loses, and what a sustained dollar slide would mean for American investors? That's stories for tomorrow. But for now, I'm just inclined and ready to take your calls now at $88.99 at KPP financial accountability means more than advice. It means we invest alongside you through our parallel investing approach. When we recommend an investment for clients, one or more KPP principles invest their own capital at the same time. Same day, same price, same percentage. If your portfolio moves, ours does too. That is alignment. That is transparency. That is the KPP difference. Visit investtalk.com to get your free portfolio review. Invest talk. Tell your friends they can listen live, download the free podcast, or watch invest talk on our YouTube channel. And they can leave their finance and investment questions anytime on $88.99. Let's go talk about Germany. That is our main focus point today. I know most people don't think about Germany, unless they think about maybe World War II. Even though Germany is still a very large economy, it's one of the most dynamic in Europe. It's had a very strong fiscal prudence over the years. But that is changing. And it's changing in ways that are very similar to what's happening here, but ahead of time. Now, the recent report that came out showed that combined spending relates to old age and illness account of around 70% of total social spending in Germany last year. And spending relates to old age and illness was responsible for 80% of the real increase in spending since 1992. Think about that. Just for inflation, all this spending increase is just basically spending on the elderly. And the social budget is now growing faster than GDP. Social spending rose 11.5% between 2019 and 2005 adjusted for pricing. And the share of the social budget is now at a record high of 32% and is expected to push towards 36% by 2030. And what is called the dependency ratio is worsening. It's the ratio of the baby regeneration that is retiring and a shrinking tax base of prime age workers. Sound familiar? Very similar. This is the reason. This is why I talk about the fourth turning all time. I think it's a great book. It's a great, I love studying cycles because I do think cycles matter in. I see it all the time in charts. I see it all the time in the ebb and flow of themes in the market, the business cycle, but then it's the longer term cycle. And that's really what fourth turning talks about. But the reason why a lot of Western companies are on the same timeline is because they were a lot of them were involved in World War II. And that was the last four turning and then you had the first turning and you go read the book. And there's a lot of things that are aligning both around the world. The slightly different, but similar. What's happening in Europe is very similar. What's happening here? But it's been accelerated because they have not had some of the positive aspects that can keep the budget deficit at bay, which is for us for a long time, we had rising child, child, they call it birth rate. There we got birth rate much better than Europe. We also had more immigration. So younger workers coming in paying taxes, etc. So we're about 10 to 15 years behind Germany in the demographic curve. So when you see what's going on there, that's what's coming for us. Now our social security system or a pension system is a little bit less generous than what you see in Europe, but it is fairly similar. The big difference though is less generous on the social security side or a pension side, but it's our cost of health care is way higher and that makes our fiscal trajectory actually worse because of the Medicare side. Everyone talks about social security, but it's really Medicare, Medicaid. That is what is driving the inflation cost. So how do you get that, and you keep that at bay is the big question. But the main point is their trajectory is very similar to ours. How does this impact your investments in the markets? Well first off, rising volumes. So we talked about the crowding out effect of all the hyperscalers and them issuing bonds and stopping up all the capital that's now pushing rates higher on the long end of the treasury curve, but that's happening around the world in developed markets where they're having to tap the bond market more and more, any more capital. And Germany is one of those. So they're also pushing up yields because they are demanding more capital to plug their social security whole or their pension hold. Now that usually the release valve for this is weaker currency. Problem is that every currency, remember, currency exchange rates are relative. But that's why gold and silver and all hard wrestlers are going up against all of these currencies is because of the debasement and the evaluation and the fact that they all are going to have to monetize the debt in some way, shape, or form. And then it's, okay, what sectors do you invest in? Not just gold and silver hard assets, but also medical, for example, there's a secular tail when not just here in the United States with this boomer generation retiring, but European boomer generation retired. So being overweight health care is probably a smart move as well. And then geographic diversification, we talk a lot about having foreign exposure, such as general phone exposure, it's also being smart with it, shifting capital to emerging markets where the population is young, it's growing, it's urbanizing, places like Southeast Asia, Latin America, India. These countries will benefit from a demographic divide where countries with poor demographics are, this is not great, but it's not horrendous. China is really bad, right, because of the one child policy. Europe is better, but still not good. So that's another reason why you want to have more exposure to these smaller countries that have a working age population that really will be the workforce of the world for the next decades to come. Let's go answer a YouTube question. Will road says, I think, I can't think, I can't thank you enough. There we go for the advice over the years. I would like your thoughts on ETF with a ticker symbol, X, H, R, X, sorry, it's X, H, S, X, H, S. This is the state street spiders, S and B health care services. Oh, interesting. I did not plan this. I promise you. He says, I will be buying it in my Roth IRA, well, the health care sector was being beaten down or had been. It has been on the good run this last year. I'm up over 40%. I'm wondering how it looks as a long-term hold on those lines, what sectors should be looking towards buying that are currently being done. With the last part, I would say software in general, I think is probably a good place. But when it comes to this particular name, this health care services, which is interesting, which you're kind of weeding out, the, I would imagine the pharma names. I'm looking at these names. A lot of them are more biotech, you have 10 health care. All of these names I don't really recognize. So it's pretty small, let's see what it looks like. Yeah, this tends to be like a small cap growth fund, 98% health care. So 59 different names. I'll look at the performance. How is this performing compared to the sector as a whole? So this year, it's up 28%, which is the 24% tile within the health care category, which is good, top quarter. Last year is that 50% tile, so right in the middle, 51% last year before, right in the middle, and 33% top third in 2023. So overall, it's been a relatively good performer over the last few years, above average. I generally like it, let's see what the price, the price is 35 basis points a year. It's a little expensive in my book. But once again, going back to what I just said, I think there's a lot of secular tailwinds here. So overall, I like this name. It was XHS. Let's Let's play a new listener question now from 8 to 8, and you're not sure? Hello, in your talk, this is Sternoy Yannick from Denmark, going again, I have a question about which sectors to look for, at this point, I'm already overweight or I'm supposed to go, I also have a lot of oil, I have listened to your thesis that in the fall there may be some, or what is the called, the market will go down, perhaps, as it usually does in the fall. I'm here, you say that bonds right now isn't a good idea, has a very delio suggests. Could you guide me as to which sectors for small investments say $2,000 at this point? I should look for because I'm anticipating a kind of going down in the market on the short term, but I can't seem to find other than gold and oil this year, do you agree that this is so, if you happen, it's all to be very happy, thank you very much. Well, I can tell you the sectors that we're focusing on, materials which is kind of within the gold and silver, but there are many others, talk about copper all the time, that are also attractive over the long term. So I like materials in general, so I'd probably broaden that out. Now the energy patch, I said this before, I'm not, I think that there is near-term, well, I'll probably go higher because of the quagmire that we find ourselves in in the Middle East, but I don't find that to be a great long-term place, meaning I'm talking about like oil and gas, EMP companies, things like that, much rather own pipeline companies, refineries, alternative energy type of businesses, etc. So then outside of that, industrial is an easy one, very easy, economy is still growing, there's a lot of government spending, there's a lot of demand for industrial products that go into AI data centers is going to be secular demand for that as well as maintenance products for those data centers as well, so industrials, industrials, industrials, also like I said, healthcare, healthcare I think has some good tailwinds, but I'm not a big fan of utilities, long-term, they're their bond proxies and bonds aren't doing well, they're also relatively low, returns long-term because they kind of, there's a limit on their profitability due to regulation, defense consumer staples also been struggling a bit in the bits of inflation, also bond proxies, consumer cycle also has been struggling as the KHIP economy continues to plough ahead until something breaks there, but yeah, so that's a materials energy, sorry materials, industrials, and healthcare would be the places I would be focusing on. Now let's answer one more question, yeah. Hi, Duncan from New York, thank you for all that you do. I'm trying to look at two stock tickers, the way that I came up with this was after listening to your podcast, I was looking for now probably small cap stocks going into healthcare, the two stocks that I have is L-M-A-T, and I also have H-C-K-T, H-C-K-T, I found from the Russell 2000 and has a return on equity over 20% and about 8% on return on assets from Fidelity, and L-M-A-T has about 60% return on equity and 10% on return on assets that information is from Fidelity, so I'm just trying to choose one, and those are the two that I narrowed down from the Russell 2000, I'm leaning towards L-M-A-T because it is like a healthcare stock, but I'm just looking to see what you guys think and what I should add to my portfolio for the next year or so, thank you. Bye. We're looking at Hackett Group, they provide advisory benchmarking and transformation consulting services of kind of consulting business, I think the consulting business is going to struggle. Yeah, return on equity is high around 20%, but in the age of AI, I think the consulting is going to struggle, their free cash flow, still is only about 31 million, which has been falling, they have a decent amount of debt in their balance sheet and the chart is trending lower, so I'm definitely staying away from Hackett Group, but L, what was the L-M-A-T, this is a different business, as you said, they're in the healthcare space for the design, manufacturer, vascular devices for vascular surgeons, the problem with that one is the chart is also very future, so you're looking at two names that have very poor momentum, now this has better support here, down around the mids and the mid 70s, we're with that now, those are in 287 this year, 318 next year, it's a $79 stock, so still not cheap, even though it's come down in relative strength is 60, sorry, not 61, 16, 16, $1.8 billion market cap, the question is, why is it down, is because surgeries are down, but their free cash flow is pretty solid, 73 million, on a $1.6 billion free enterprise value, which you're around a 5% free cash flow yield, pretty good return, actually 16%, like you said, return on, invest the capital 10, solid, good business, overall, I think this is good, I like the balance sheet, because there's no debt, I think the cash flow is good, I like healthcare, but this is an easy one, because I would just use the lows from last year, kind of as you're out, even say low as, I call it $70, if it breaks 70, then you're out, and right now you're buying it in the high 70s, so I think there's not a ton of downside, if you use that as you're out, and I think this could bounce back nicely. Let's go answer a YouTube comment question, "Dalty Pete says, can you please do a breakdown on how inflation erodes at your portfolio and the importance of compounding your inflation rates with your contributions, even when the amount exceeds the max contribution limits thank you, well you teach." Well, let me simply just help you understand how inflation, how you see inflation in your portfolio, but most people do not realize, they don't pay any attention to this, they pay attention to when they go to the grocery store when they pass the gas station or fill up at the gas station, but inflation is all around you, and it's in your portfolio as well, so you have to realize that the market is priced normally, it is not adjusted for inflation, so if you earn 5% in the markets, but inflation is 3%, your net, net, purchasing power is only improved 2%, so it's important to earn above the level inflation on a consistent basis, I think that's the best way to put it, and so you can compound your wealth and improve your purchasing power year after year after year, so when you're calculating your returns in the markets or in your portfolio, make sure you back out inflation and see where you actually came out at, those investors thought I'm just inclined, we have one goal here, each and every week, they just help you achieve your own version of Fancy Freedom, and it work continues after this final breaks, it's questions that now at 8.99 sharp, in today's market, more than ever you need unbiased investing guidance, because it can help you achieve financial freedom, this is Invest Talk and you've come to the right place, Justin Klein is here now taking your calls live, so step up with your questions 88899 chart. Given the AI boom, or if they're still room to run in these natural gas turbines for power, anyways, thanks. Well, I will say, if I'm going to embed on the AI space, these are the type of names I would rather own than a lot of this very cyclical chip names, but what I will say is in your term, these are businesses that are starting to lose momentum, even Jerry Vernova, earning supposed to be $30.69 up 73%, this year versus last year, $17.69, they lost money back in 2023 at 47 cents, and then us over $7.22, so it's a very cyclical business, but there's a lot of demand for turbines, or energy, which makes sense, but next year, earnings is just to drop 20%, $24.70, so that's one of the reasons why that has lost a lot of momentum is trading at $950, $3, so basically I'm forward looking earnings, you're talking about a 40 times multiple before a company that actually is expected of shrinking profits next year. That's the issue, is that these names, I always use Zoom as the example, not to bag on Zoom, we actually own Zoom today, but we bought it way after it dropped, but it was the extrapolation of years and years of year of growth going out many years. So in 2020 and 2021, everybody was on Zoom, everybody, everyone thought, and the market said, oh, well, they're growing 100% a year, they're going to keep growing 100% a year for the next decade, whatever. And obviously, it wasn't the case. And the same thing is happening going to happen in the eye space, where yes, growth is here, but there's going to be a right sizing and spend, there's going to be some sort of capacity for capital raising capital for these identity centers, there's backlash from communities, there's just so much that can go wrong and so and they're all kind of price of perfection and that's why the whole sub sector is losing momentum and caterpillar and G or our no exception. So I do think these are going to be correlated with the second. Now could this be a consolidated period and then they continue to fire, certainly that's possible. I don't believe that's going to happen, but you have to make that call. I think we're going to go through a multi quarter period of correction with all of these names and caterpillar NGE are in that vote. Now let's talk about some concepts that were floated over the past few years and whether or not they were good ideas for investors. Now the first one is really about thematic ETFs. And the question is, why do people keep buying? Because the numbers are bad. The returns, the dollar weighted returns are very poor, meaning when money is going in, capital is going into these ETFs versus coming out and whether the app person is making or losing money and the reality is the returns are way lower than what the return is of the overall portfolio because people chase returns. We know that because people love stories by the compelling. It may be taps into something that they have a bias towards that they're interested in. You know, I always think of Elon going to Mars. It's a ridiculous concept, but people love the idea of, oh, we're going to go to Mars. No, we're not going to Mars. Okay. It's not at least in any of our lifetimes. So thematic ETFs bad idea. Now what about private markets now, potentially going into 401Ks? That's another thing that's been floated. Another bad idea, why because of illiquidity? Unfortunately, the industry is lobbying for regulation, etc. But you're trying to match an illiquid asset to a industry that needs liquidity. People need money from the 401Ks. And then lastly, I think there's a question for the average investor, which is what about do you have money left over for a big bet? People like to make those big bets, those penny stocks, whatever. And the reality is you can do that, but at the margins, but make sure whatever you're doing, the core of that makes sense and has a plan. And that is established so that you can have some sort of stability with the vast majority of your portfolio. Well, that about does it. I'm just inclined to money of KPP financials parallel investing. We could trade for our clients, we could the same trade for ourselves, same day, same price, same percentage, no friend running, no special treatments. We invest right along side our clients. And we share the same risk and have potential for success. You can learn more about heading over to investtalk.com. Please tell your friends and family about their free podcast downloads. If you find any time at iTunes or Spotify, be sure to rate on iTunes as well. Independent thinking should success. It's investtalk. Good name. Investtalk is a trademark of KPP financial because of the nature of the interactive dialogue inherent in the format of this program. It's important for the listener to understand that not all comments made will apply to that. Specifically, nothing said she'll be taken to be investment advice or shall statements on this program be considered an offer to buy or sell security. Because such advice is rendered solely on an individual basis and at times will require that the investor review a prospectus before investing. Investtalk is a copyrighted program of client, Pavless and Peasley financial. A registered investment advisor firm, which retains all rights. For more information regarding KPP's investment advisors, call 1-800-557-5461. Thank you for listening and your comments and questions are welcome on our 24-hour listener line at 888-99-CHART. [BLANK_AUDIO]