1 00:00:00,200 --> 00:00:05,320 You are listening to Carrie Letz's Financial Survival Network, where you get valuable information 2 00:00:05,440 --> 00:00:10,800 you just can't find anywhere else to thrive in today's trying times. You need 3 00:00:10,839 --> 00:00:17,399 the Financial Survival Network now more than ever. Go to Financial Survivalnetwork dot com 4 00:00:17,440 --> 00:00:24,120 and get your free newsletter and gift. Financial Survival Network now more than ever, 5 00:00:27,559 --> 00:00:32,000 and welcome you are listening to and watch on the Financial Survival Network. 6 00:00:32,039 --> 00:00:35,399 I'm your host, Carrie Lutz. Hey, we are midway through July. 7 00:00:36,039 --> 00:00:39,679 Personally about to hear from hasn't been on the show in years, but has 8 00:00:39,719 --> 00:00:45,640 been racking up trading profits all the all during that time, and for good 9 00:00:45,679 --> 00:00:51,240 reason too, Andrew Prowitz, The Disciplinedinvestor dot com. If you've got a 10 00:00:51,320 --> 00:00:56,119 question for him or myself, email kl at Carrie Lutz dot com. Andrew, 11 00:00:56,200 --> 00:00:59,320 great to have you back on the show. With all the turmoil, 12 00:00:59,560 --> 00:01:03,439 all the chaos in the United States and around the world. You know, 13 00:01:03,679 --> 00:01:10,519 like reminds me of that movie Full Metal Jacket. No, you know part 14 00:01:10,879 --> 00:01:17,120 is the part where the gunnery sergeant says marines will live and die, but 15 00:01:17,239 --> 00:01:23,439 the Marine Corps is forever and countries companies will go out of business bankrupt, 16 00:01:23,799 --> 00:01:29,120 but the stock market is forever here andrew it is and seems to only want 17 00:01:29,120 --> 00:01:32,560 to go one direction lately. It's kind of fascinating, how oh the last 18 00:01:32,840 --> 00:01:34,200 I don't know, call it a few months really for a longer time than 19 00:01:34,200 --> 00:01:37,959 that, but for a few months. Good news is good news, bad 20 00:01:38,000 --> 00:01:41,560 news is good news. Any news is good news. And the fact is 21 00:01:41,599 --> 00:01:44,920 that the Fed has done a great job of holding a carrot in front of 22 00:01:44,959 --> 00:01:47,640 all of our noses right just kind of leading us to what they want to 23 00:01:47,680 --> 00:01:49,920 get that you know, hey, you know, inflation is here, but 24 00:01:49,959 --> 00:01:53,920 don't worry about it again. They use that for a while, and now 25 00:01:53,920 --> 00:01:57,560 they're talking up the whole idea of and they talked about disinflation. Now we 26 00:01:57,599 --> 00:02:00,920 actually have some deflation that's that's setting in and some of the world is actually 27 00:02:00,959 --> 00:02:06,159 reducing rates. What's really fascinating though, right now is that everybody's really jacked 28 00:02:06,200 --> 00:02:09,319 up and excited about how a rate cut could be so exciting for the markets. 29 00:02:09,800 --> 00:02:15,199 And we're seeing that recently there's been a steepening in the Yell curve, 30 00:02:15,240 --> 00:02:20,159 meaning that shorter term is lower or the longer term is starting to come up 31 00:02:20,159 --> 00:02:23,319 a little bit instead of the still inverted, but not as inverted, if 32 00:02:23,360 --> 00:02:27,280 you will. That's been good for net interest margins for banks. That's why 33 00:02:27,319 --> 00:02:30,919 we're seeing back of America and Goldman and even Morgan Stanley after kind of a 34 00:02:30,039 --> 00:02:35,240 rough going on, their earnings pop back into the positive. And we're seeing 35 00:02:35,280 --> 00:02:38,599 all the other areas do very well, even though not as much on the 36 00:02:39,039 --> 00:02:43,120 investment banking business and even on the trading business, but some of the bond 37 00:02:43,199 --> 00:02:46,520 business that they're doing as well as the net interest margin money they're making, 38 00:02:46,599 --> 00:02:49,879 which is their bread and butter, how they actually make money, is doing 39 00:02:49,919 --> 00:02:53,639 real well. So kind of a fascinating time right now. Yeah, So 40 00:02:54,439 --> 00:03:00,439 I read several people theorizing that inflation doesn't really happen much from government spending. 41 00:03:00,840 --> 00:03:06,639 It happens when interest rates go up and the banks can make higher profits on 42 00:03:06,759 --> 00:03:12,120 loans, and as we know, fractional reserve banking, this is private creation 43 00:03:12,240 --> 00:03:16,439 of money. Is that what's happening now where the banks are making bigger spreads 44 00:03:16,479 --> 00:03:20,479 so they want to make loans. Now, I don't think. I don't 45 00:03:20,479 --> 00:03:23,680 think that. I think that is an inflationary component that could be happening that 46 00:03:23,800 --> 00:03:28,039 hasn't been like that for a while with the inverted ukur for a while, 47 00:03:28,039 --> 00:03:30,840 they were really retracting a bit, and they were really doing their best to 48 00:03:30,879 --> 00:03:34,159 show up their balance sheets everywhere they can because they didn't want to have another 49 00:03:34,199 --> 00:03:37,280 repeat. Remember something about the banks. The banks were got to get out 50 00:03:37,319 --> 00:03:39,560 of jail free card by the FED about a year and a half ago or 51 00:03:39,639 --> 00:03:43,960 so back, we saw that some of these banks were going out of business. 52 00:03:44,000 --> 00:03:46,800 And what happened was the reason was that all of a sudden, investors 53 00:03:46,800 --> 00:03:50,960 said, wait a second, let me get this grat You have all these 54 00:03:51,039 --> 00:03:54,719 bonds that you bought and you're on your balance sheet and now they're worth twenty 55 00:03:54,800 --> 00:03:58,879 percent less than they were. And when we look at those, we have 56 00:03:59,000 --> 00:04:00,759 to value them where they're going to be. You're never going to get out 57 00:04:00,800 --> 00:04:02,639 of them without a major loss. So you know what, we're going to 58 00:04:02,680 --> 00:04:06,800 sell your shares down or you're not going to meet the required amounts for your 59 00:04:08,680 --> 00:04:13,280 you know, your government stress tests if you will. So what happened was 60 00:04:13,319 --> 00:04:15,639 that the government said, come on, we know these bars are good, 61 00:04:15,959 --> 00:04:19,680 and they said, sell to us. We'll pay you one hundred percent of 62 00:04:19,720 --> 00:04:24,439 the face value right now because we'll hold them to maturity. Because during You 63 00:04:24,480 --> 00:04:28,360 know, if they do this, they're fine. The issue here is that 64 00:04:28,399 --> 00:04:32,399 the FED is a much longer holding period ability. You know, their risk 65 00:04:32,480 --> 00:04:35,600 is an infinite in terms of if they can hold things for long enough. 66 00:04:35,839 --> 00:04:40,279 So true, you can hold something. If you and I bought an investment 67 00:04:40,279 --> 00:04:43,319 it's down eighty percent, that looks like it's going lower. And let's say 68 00:04:43,319 --> 00:04:46,079 we're margined on it. That's a time when we have to say, okay, 69 00:04:46,360 --> 00:04:48,639 uncle, you know we're out. The FED can say, I don't 70 00:04:48,639 --> 00:04:51,600 care, we'll hold them foreveryone. We'll just create money to buy it. 71 00:04:51,920 --> 00:04:56,920 What happened in this cycle was twofold. The FED made a terrible mistake, 72 00:04:57,000 --> 00:05:01,199 as they always do. They misjudged dramatically, not only inflation, but the 73 00:05:01,240 --> 00:05:08,000 combination of low interest rates and enormous that the word doesn't fit, it's much 74 00:05:08,000 --> 00:05:14,480 bigger word whatever. It a gigantic, infinitesimal amounts of stimulus that was rained 75 00:05:14,480 --> 00:05:19,079 down on individuals and companies, low tax rates, get get out of jail 76 00:05:19,120 --> 00:05:28,240 free cards, everything that went on, mortgage repayment, pauses, student loan 77 00:05:28,360 --> 00:05:31,240 forgiveness, you name it. All this that happened. That was the inflationary 78 00:05:31,319 --> 00:05:34,160 situation. Now, some would say, well, we had no choice. 79 00:05:34,399 --> 00:05:38,920 Well, I think we had a choice of not doing the IRA, which 80 00:05:39,000 --> 00:05:44,399 was the Inflation Reduction Act, which was stibulus, the opposite of what its 81 00:05:44,480 --> 00:05:47,079 name was. Milton Friedman always said, if you want to know the purpose 82 00:05:47,199 --> 00:05:51,600 of any law, just do the opposite of what it's named. Right. 83 00:05:53,000 --> 00:05:59,920 Unemployment Insurance actually ensured that we have unemployment, and the Inflation Reduction Act should 84 00:06:00,160 --> 00:06:03,720 be called the Inflation Acceleration Act, right, correct? Yepah, So that 85 00:06:03,800 --> 00:06:05,839 was that was the final nail on the That was the final nail on the 86 00:06:05,839 --> 00:06:10,360 coffin, Right, That was the final I think that was the final you 87 00:06:10,399 --> 00:06:16,120 know moment that we had a situation where you know, that was the final 88 00:06:16,160 --> 00:06:19,759 accelerator of the inflation that we're having already. But you know, the thing 89 00:06:19,759 --> 00:06:24,680 about inflation. Everybody's all shot up and excited about how inflation has come down 90 00:06:24,759 --> 00:06:28,759 dramatically, which it has, but remember something, inflation will always come down. 91 00:06:29,399 --> 00:06:31,959 Yeah, you have five percent inflation, ten percent inflation for a couple 92 00:06:32,040 --> 00:06:38,759 three years, and now inflation is zero. Everybody's excited. Problem is, 93 00:06:39,279 --> 00:06:42,800 yeah, you have twenty five percent compounded, but twenty five percent simple math, 94 00:06:44,240 --> 00:06:49,439 higher prices forever because God knows. The FED does not want inflate. 95 00:06:49,600 --> 00:06:53,959 Deflation and by the way, those people you probably talked about this carry but 96 00:06:54,519 --> 00:06:57,439 deflation seems like yeah, I like deflation right. Wait wait, let me 97 00:06:57,439 --> 00:07:00,000 get this. This is straight price. The lower that's for a question hour 98 00:07:00,079 --> 00:07:04,480 goes up. Yeah, this this seems awesome. The problem with deflation that 99 00:07:04,560 --> 00:07:10,240 most people don't know is it creates a psychological I'll wait. You know what 100 00:07:10,360 --> 00:07:12,879 the house is, five hundred thousand, A few of them are coming down. 101 00:07:13,079 --> 00:07:15,959 I'll wait at while the cars twenty five, fifty thousand, pick a 102 00:07:15,000 --> 00:07:17,199 number, whatever it is. You know, we're seeing the dealers and cutting 103 00:07:17,199 --> 00:07:20,959 prices. I'll wait. And as you weight the consumer is not spending. 104 00:07:20,959 --> 00:07:24,639 And as the consumer's not spending, the car dealers say, wait a minute, 105 00:07:24,800 --> 00:07:28,160 we need to cut prices even more to bring them in create more incentive 106 00:07:28,240 --> 00:07:31,319 somehow, sales bonuses, zero interest rates, whatever it is. And what 107 00:07:31,439 --> 00:07:35,000 happens in a deflationary market is that prices come down, but more so, 108 00:07:35,639 --> 00:07:40,199 sales go down traumatically. The reason why things is so good right now is 109 00:07:40,199 --> 00:07:44,360 because we have inflation. The FED wants a little bit inflation. They come 110 00:07:44,399 --> 00:07:46,560 up with this two percent that everybody in the world, by the way, 111 00:07:46,600 --> 00:07:51,560 brought into this arbitrary two percent inflation rate, which may change because if things 112 00:07:53,000 --> 00:07:55,959 don't work out and they can't get inflation down, they'll just probably put a 113 00:07:56,040 --> 00:08:01,240 three handle on it and say, well, you know it's about to close. 114 00:08:01,519 --> 00:08:05,319 It's almost it's you know, we're good at that. So going back 115 00:08:05,360 --> 00:08:07,920 to something you said like the fedce time horizon, I want to go back 116 00:08:07,920 --> 00:08:15,800 to the mortgage crisis of eighth nine, where basically the FED all these mortgage 117 00:08:15,879 --> 00:08:22,240 backed securities were split up into tranches and interest to you know, I don't 118 00:08:22,279 --> 00:08:26,279 even remember all the terms for it, and the FED just basically bought them 119 00:08:26,319 --> 00:08:31,440 all. And guess what, the housing crisis was over, and they actually 120 00:08:31,480 --> 00:08:37,360 made money off of all this stuff that people don't even realize that that bailout 121 00:08:37,639 --> 00:08:45,600 of the whole mortgage market led to enormous profits for them and a redistribution of 122 00:08:45,639 --> 00:08:52,240 all these houses that were foreclosed. You know, your Blackstones got them and 123 00:08:52,240 --> 00:08:56,360 and all your other hedge funds bought them up because they were borrowing for nothing, 124 00:08:56,960 --> 00:09:01,200 and the turned them into rental properties. And you know, maybe it's 125 00:09:01,240 --> 00:09:03,279 not that great now, but they're so far ahead of where they work. 126 00:09:03,600 --> 00:09:07,679 I mean, they owe thousands of homes in our home state here in Florida, 127 00:09:09,000 --> 00:09:13,600 the thousands, and now those houses, the rents have gone up and 128 00:09:13,720 --> 00:09:18,960 the equity in those houses has doubled, and the FED got their money. 129 00:09:18,559 --> 00:09:22,279 So everybody's happy here, right. Yeah, Well, don't forget. They 130 00:09:22,279 --> 00:09:24,120 set up a you remember Maiden Lane, that was basically a hedge fund that 131 00:09:24,200 --> 00:09:28,399 was set up by the Fed and the treasure out a lot of this bad 132 00:09:28,440 --> 00:09:30,960 debt in just hold it forever and figure out if they get to make money 133 00:09:30,960 --> 00:09:33,720 on it, which they did. Yeah, it was essentially a hedge fund. 134 00:09:33,799 --> 00:09:35,480 Well, how great is that? Yeah, now that maybe it's not 135 00:09:35,559 --> 00:09:41,960 such good investment buying the government's debt because nobody else wants it, and the 136 00:09:41,240 --> 00:09:46,480 kind of the situation we're in, so looking ahead, putting the election aside, 137 00:09:46,480 --> 00:09:50,399 because that doesn't really matter, because the structural problems in place, these 138 00:09:50,440 --> 00:09:54,440 deficits, social security, running out of money and all this. And yet 139 00:09:56,159 --> 00:09:58,799 how can the stock market go up with that type of backdrop. Well, 140 00:10:00,080 --> 00:10:01,480 still a lot of stimulus in the in the markets. I also think the 141 00:10:01,480 --> 00:10:05,519 one thing that there's something that nobody really talks about very much, and I 142 00:10:05,559 --> 00:10:09,320 can't give you absolute It's not conspiracy theory at all, by the way, 143 00:10:09,320 --> 00:10:11,519 but I can't give you absolute proof. But we do know something we have 144 00:10:13,720 --> 00:10:20,159 around the world. There are countries that have funds. Switzerland has a gigantic 145 00:10:20,279 --> 00:10:24,120 cyber wealth fund. Japan has been buying directly into their market. Norway has 146 00:10:24,159 --> 00:10:28,600 been. You name all these countries. Saudi Arabia, they own a lot 147 00:10:28,639 --> 00:10:35,000 of stocks, they have enormous amount of assets. They have same as the 148 00:10:35,000 --> 00:10:39,720 FED. They basically have an unlimited time horizon, right, and as you 149 00:10:39,799 --> 00:10:41,559 go out the time horizon, your risk kind of goes down to nothing. 150 00:10:41,879 --> 00:10:46,799 Well, with a dollar increasing in value, they convert their value of their 151 00:10:46,840 --> 00:10:50,159 lower currency into dollars. It's been going up in value, they press that 152 00:10:50,240 --> 00:10:54,200 up. They buy the stocks in our companies. Not to mention our companies 153 00:10:54,240 --> 00:10:58,200 buying the stock in our companies. It might be one hundred and ten billion 154 00:10:58,240 --> 00:11:03,159 dollar buy back. One hundred and ten billion dollar buyback. That's probably buy 155 00:11:03,720 --> 00:11:09,799 certain plenty of countries and islands throughout Central America for ut ten billion dollars. 156 00:11:09,080 --> 00:11:13,759 But they're buying back one hundred ten billion dollars in their stock at basically any 157 00:11:13,759 --> 00:11:18,159 price that it goes you went to why Apple everybody's so excited about their miserable 158 00:11:18,200 --> 00:11:22,000 earnings that they had and that we're not quite sure what that AI, the 159 00:11:22,039 --> 00:11:24,639 Apple Intelligence announcement was, But the stock is of like twenty something percent since 160 00:11:24,679 --> 00:11:31,360 then. It's a lot of the numbers that came out from the reality of 161 00:11:31,399 --> 00:11:33,279 a buyback. But that's what's going on. We have all limited amounts of 162 00:11:33,279 --> 00:11:39,080 cash that's being generated by these countries. You're taxation that buying into our stocks. 163 00:11:39,919 --> 00:11:43,480 That's a backdrop of almost like we don't really care what the valuation is 164 00:11:43,600 --> 00:11:46,480 because if you look at evaluations, there's two ways to look at what's going 165 00:11:46,480 --> 00:11:52,159 on. One is are you kidding me? You know, as a valuation 166 00:11:52,360 --> 00:11:58,240 area of some of the high tech and some of the part of the of 167 00:11:58,279 --> 00:12:01,559 the SMP market cap, the largest cap, that's like, oh, that's 168 00:12:01,559 --> 00:12:05,919 a little bit that's frothy. But the rationalization from the bulls is they're going 169 00:12:05,000 --> 00:12:07,759 to work their way into this. You know, AI is going to create 170 00:12:07,759 --> 00:12:11,840 productivity, is going to create a great backdrop for earnings and a lot which 171 00:12:11,840 --> 00:12:13,960 we'll see over the next three weeks, which I think there'll be some disappointment 172 00:12:15,039 --> 00:12:18,480 with only because AI is going to take a long time to get going. 173 00:12:18,679 --> 00:12:24,639 From the perspective of companies, there are certain picks and shovels companies that are 174 00:12:24,679 --> 00:12:26,919 doing well with this, Microsoft being one of them, maybe Amazon, maybe 175 00:12:26,960 --> 00:12:33,279 Google with their clouds, and Nvidia of course amdm not so shot up about. 176 00:12:33,000 --> 00:12:37,519 SMCI is another one, Taiwan and Semi Coonductor. So the few of 177 00:12:37,519 --> 00:12:41,480 them that are doing very well. Of course, the weight loss companies that 178 00:12:41,519 --> 00:12:43,360 everybody in the world wants to just go, hey, hey, twenty pounds, 179 00:12:43,360 --> 00:12:46,559 thank you very much. So there are some things that are happening right 180 00:12:46,600 --> 00:12:50,120 now that are really interesting. The other side of the market, though, 181 00:12:50,679 --> 00:12:54,840 is fairly valued. You take the equal weighted and you take the lower tier. 182 00:12:56,080 --> 00:13:00,480 That's why we're seeing this incredible rally in small caps, because it's happening 183 00:13:00,559 --> 00:13:05,200 is money. Enormous amounts of money are starting to come out of tech and 184 00:13:05,399 --> 00:13:09,879 rolled somewhere, and those managers that have a requirement to be in something, 185 00:13:09,879 --> 00:13:13,279 where are they gonna go, Well, let's see, financials look pretty good 186 00:13:13,320 --> 00:13:16,440 right now, especially if we're seeing a yield curve start to steep it a 187 00:13:16,440 --> 00:13:20,559 little bit and the FED coming to a little bit of a real reality that 188 00:13:20,600 --> 00:13:24,360 they're gonna cut, which we'll see. That's number one. You see number 189 00:13:24,360 --> 00:13:26,600 two. You see small caps. Oh my gosh, you see the run 190 00:13:26,639 --> 00:13:30,399 on small caps. It's like hysteria. They're on a ranger, they're on 191 00:13:30,440 --> 00:13:33,600 a bender. Yeah, you know. And there's some Tom Lee came out 192 00:13:33,639 --> 00:13:37,759 today with like forty percent in the next I think twelve weeks is a prediction. 193 00:13:37,639 --> 00:13:41,440 And so so the bottom line on this is that there's a lot of 194 00:13:41,519 --> 00:13:46,320 reversion to the mean alternative assets that are going to be not alternatives, but 195 00:13:46,799 --> 00:13:50,039 alternative places to play in terms of where to put money right now that have 196 00:13:50,120 --> 00:13:56,720 been undervalued for some time. Growth has dominated value tech, biotech, consumer 197 00:13:56,759 --> 00:14:03,720 discretionary versus utilities and financials, consumer staples. These have been and amounts of 198 00:14:03,720 --> 00:14:07,080 money we're talking about because we're talking about companies that money's coming up three trillion 199 00:14:07,120 --> 00:14:11,519 dollar companies. We're not talking about a one for one. It's like a 200 00:14:11,679 --> 00:14:13,559 dollar comes out of these can buy three dollars worth of the other companies. 201 00:14:13,720 --> 00:14:18,200 So there's a multiplier factor that's going on right now. So there's a lot 202 00:14:18,240 --> 00:14:22,120 of things that are pushing the markets up. Higher, prices higher all time 203 00:14:22,200 --> 00:14:28,320 highs often beget all time highs. There is excitement that there is some decision 204 00:14:28,480 --> 00:14:33,120 on I think the outcome of the presidency. I don't think that really holds 205 00:14:33,159 --> 00:14:35,840 a lot right opportunity. They'll build it up, and I think there's one 206 00:14:35,840 --> 00:14:39,720 more thing going on, Kerry. I think over the last twenty years, 207 00:14:39,759 --> 00:14:43,000 we've had some near death experiences. Shit, I'm not sure if right. 208 00:14:43,159 --> 00:14:46,039 I'm just talking about the last twenty years. We've had a near death experience 209 00:14:46,080 --> 00:14:50,240 financially eight oh nine, right, is that in the twenty year period. 210 00:14:50,279 --> 00:14:54,200 I guess so, we've had some other craziness by the way in between there 211 00:14:54,559 --> 00:14:58,600 and then we had a near death, true near death experience in two. 212 00:15:00,279 --> 00:15:01,840 I think a lot of people are like, look, if the worst cup's 213 00:15:01,840 --> 00:15:05,919 the worse the shit, it's the fan. The markets come down dramatically, 214 00:15:07,360 --> 00:15:11,600 it's going to be opportunity when the FED will step in. Even though we're 215 00:15:11,679 --> 00:15:13,720 kind of are we tapped, I don't know. You know, seventy eight 216 00:15:13,720 --> 00:15:18,919 trillion dollars of balance sheet assets and debt, that's multitude of that of the 217 00:15:18,000 --> 00:15:22,080 US government. But they will come to the rescue, creating money out of 218 00:15:22,080 --> 00:15:24,799 nowhere. Will just look like Japan for a period of time, so I'm 219 00:15:24,840 --> 00:15:26,720 really not that worried. Plus, the fact is, if I was to 220 00:15:26,720 --> 00:15:31,360 pull my money out right when the situation hit, I was lost better. 221 00:15:31,440 --> 00:15:33,799 Yet, I'm not thinking about today or tomorrow. I'm not thinking about the 222 00:15:33,840 --> 00:15:39,360 war in I'm taking poison in Ukraine or in Middle East. I'm not concerned 223 00:15:39,360 --> 00:15:41,799 about what's going on in some of the areas of housing and maybe even the 224 00:15:41,799 --> 00:15:46,240 commercial property markets around the world. I'm not concerned about, you know, 225 00:15:46,240 --> 00:15:48,919 the amounts of debt that these companies have because I'm thinking about today's mrow. 226 00:15:48,960 --> 00:15:50,600 I'm going to hold my money in for much longer term. So this stuff 227 00:15:50,759 --> 00:15:54,960 has created a much stickier environment for people to just keep on putting their money 228 00:15:54,960 --> 00:16:00,399 in. Yeah, I know, I totally agree with you. And you 229 00:16:00,440 --> 00:16:03,159 know so I want to talk to you about AI because that has been the 230 00:16:03,279 --> 00:16:07,159 darling of Wall Street, the flavor of the month, if you will. 231 00:16:07,639 --> 00:16:12,279 You know the Wall Street sells dreams, right, Wall Street sells dreams and 232 00:16:12,360 --> 00:16:18,639 memes, and you know they don't like to admit it, but you know 233 00:16:18,759 --> 00:16:23,360 it's all about the story. Now, I'm sure you're using AI in your 234 00:16:23,480 --> 00:16:27,600 everyday business. I'm using it in mind maybe recording right now, with AI. 235 00:16:27,759 --> 00:16:30,840 Yeah, we're recording with AI. When I do the show notes in 236 00:16:30,840 --> 00:16:34,679 this interview, I'm going to run it through the AI and then modify it 237 00:16:34,759 --> 00:16:41,279 and then clean it up on chat GPT. So it is revolutionary and I 238 00:16:41,279 --> 00:16:48,440 think potentially more revolutionary even than the Internet was during the late nineties. But 239 00:16:49,200 --> 00:16:53,960 there's always a lag time, and there's always you think it's going to come 240 00:16:53,960 --> 00:16:59,519 out one way, Like we thought all these dot coms, zillions of them, 241 00:16:59,519 --> 00:17:02,480 if they just a dot com and their name, they were gold And 242 00:17:02,799 --> 00:17:06,519 that's that's kind of what we're going through. It's AI. And yet the 243 00:17:07,039 --> 00:17:12,319 eventual effects and AI could be far greater and more profound than the Internet, 244 00:17:12,359 --> 00:17:17,319 I think by a magnitude of ten to one hundred. But we're not just 245 00:17:17,359 --> 00:17:19,079 going to get there in a straight line. How do you play it and 246 00:17:19,160 --> 00:17:22,039 how do you avoid getting burned on this trend? Well, you know, 247 00:17:22,079 --> 00:17:26,759 you miss blockchain everything. Blockchain was golden hole. So for a long time, 248 00:17:26,799 --> 00:17:27,759 I don't remember last time I remember saying, Oh, I want to 249 00:17:27,759 --> 00:17:30,960 buy that company because it's blockchain involved. Yeah, yeah, true, you 250 00:17:32,039 --> 00:17:36,400 know correct. So I think the AI is a very interesting process. I 251 00:17:36,440 --> 00:17:38,119 think again, right now we're in the early stages. You have to look 252 00:17:38,119 --> 00:17:41,720 at this like a gold rush of you know, the eighteen hundreds when people 253 00:17:41,720 --> 00:17:44,799 would pick up and they would just run out to California. A little bit 254 00:17:44,839 --> 00:17:47,160 of a different scenario here, right, but they would run out to the 255 00:17:47,160 --> 00:17:49,599 west and risk their lives and they would go and what did we have. 256 00:17:49,799 --> 00:17:52,799 Well, they had to do a certain number of things. Number one, 257 00:17:52,839 --> 00:17:55,759 they had to get clothing, so Levi's, they had to buy picks and 258 00:17:55,759 --> 00:17:59,200 shovels. They had to get screens, they had to get they had to 259 00:17:59,200 --> 00:18:02,359 buy drinks, they had to get tent. These are the areas you know 260 00:18:02,519 --> 00:18:07,680 out there that did very well. The brothels did very well, the bars 261 00:18:07,680 --> 00:18:11,319 did well, the restaurants to a great right. Now, all these did 262 00:18:11,359 --> 00:18:15,359 well. Now did somebody absolutely make a lot of money by paying for gold? 263 00:18:15,799 --> 00:18:19,680 Maybe maybe not. Most did not. Most suffered. They just paid 264 00:18:19,680 --> 00:18:22,759 for their existence out there. A lot of companies right now are going to 265 00:18:22,759 --> 00:18:27,240 pay for their existence by this AI thing, right by just for example, 266 00:18:27,720 --> 00:18:33,359 Microsoft, Microsoft doing great. You know they have obviously their fingers or their 267 00:18:33,400 --> 00:18:37,440 their arms into open AI. Big piece of that, right, they got 268 00:18:37,440 --> 00:18:38,720 that going on. They have it. There's your they have a lot of 269 00:18:38,720 --> 00:18:42,559 things happening with the next generation of what they're doing with AI as well. 270 00:18:42,799 --> 00:18:45,079 One of the things they're also doing is they give a lot of a lot 271 00:18:45,079 --> 00:18:48,680 of money they're giving away to company to carry. Let's say, hey, 272 00:18:48,720 --> 00:18:51,680 Kerry, get how many give you a billion dollars because you're building you know 273 00:18:51,759 --> 00:18:53,640 this AI. Yeah, yeah, you'll do this, But what we want 274 00:18:53,680 --> 00:18:59,680 you to do is use that billion to buy back into the Azure network, 275 00:18:59,720 --> 00:19:03,920 into and our AI processing to help you build what you're building. So what 276 00:19:03,960 --> 00:19:07,240 do I just do with Microsoft? I just took money off my balance sheets 277 00:19:07,359 --> 00:19:11,319 and it has moved it into my income statement. Interesting, you wonder why 278 00:19:11,599 --> 00:19:15,440 they're doing so well and how all these companies can havevelos extra revenue going on 279 00:19:15,680 --> 00:19:22,119 because they're doing this situation. Amazon doing a very similar situation with credits on 280 00:19:22,160 --> 00:19:26,240 the AWS system a service platform. So we see a lot of this go 281 00:19:26,400 --> 00:19:29,559 on. This this money from the balance sheets, freeing it up and which 282 00:19:29,640 --> 00:19:32,720 is just you know assets that what do they do with it with the hopes 283 00:19:32,720 --> 00:19:34,319 that they're going to hit something that maybe they even take a piece of the 284 00:19:34,319 --> 00:19:37,559 companies. So there's going to be winners and loses, No question about this 285 00:19:37,759 --> 00:19:41,279 you know, you have to wonder, you know, companies that I don't 286 00:19:41,319 --> 00:19:47,960 know, do, for example, receptious think of the past. Yeah, 287 00:19:48,079 --> 00:19:52,079 to a degree, right, there is to copy boys, Yeah, elet 288 00:19:52,119 --> 00:19:53,799 bit your operators. Well, right, these things you don't even see. 289 00:19:53,799 --> 00:19:56,279 Some people like, what are you talking about? I don't even know what 290 00:19:56,279 --> 00:19:59,759 you're talking about. But what you have right now is the opportunity for a 291 00:19:59,799 --> 00:20:03,160 lot of of these productivity gains from much of this and from companies going under. 292 00:20:03,279 --> 00:20:07,000 Now there's always a room for someone to change what they're doing and go 293 00:20:07,079 --> 00:20:11,680 into a different business. You know, we've seen that kind of evolution over 294 00:20:11,759 --> 00:20:15,599 time. But you have to wonder, you know, where's this all going 295 00:20:15,640 --> 00:20:18,799 to? What level? I think there's some productivity issues that AI will help 296 00:20:18,880 --> 00:20:23,480 us with. Do we take it to the nth degree? And do we 297 00:20:23,519 --> 00:20:30,359 have another terminator Skynet situation out there? I don't know. Elon Musk staves 298 00:20:30,440 --> 00:20:33,400 to think so yeah, yeah, so he's very concerned about, you know, 299 00:20:33,400 --> 00:20:36,640 where AI goes. I agree with that because it's garbage in, garbage 300 00:20:36,640 --> 00:20:38,920 out the training and by the way, and thank yourselves, everybody listening watching, 301 00:20:40,359 --> 00:20:45,400 thank yourselves for giving all this information to all these major companies through your 302 00:20:45,440 --> 00:20:48,799 social media and through your files and what you do online and your search is 303 00:20:48,960 --> 00:20:52,680 that they were able to and any blog posts that you have and information that 304 00:20:52,720 --> 00:20:56,240 you've put out there on the web over the years that they're basically stealing and 305 00:20:56,279 --> 00:21:03,799 putting into their AI large language models pretty coolly exactly. So is there all 306 00:21:03,440 --> 00:21:07,400 this or is it as it coming gone? I think the picks, well, 307 00:21:07,480 --> 00:21:11,680 I think we're overdone on a lot of companies. A lot of companies 308 00:21:11,720 --> 00:21:14,440 will be trying harder to do it. I think we missed the first wave. 309 00:21:14,480 --> 00:21:15,640 If you missed it, you know, if you missed your Microsoft, 310 00:21:17,119 --> 00:21:21,359 it missed your Google. Apple's a tertiary player because they're going to use it 311 00:21:21,400 --> 00:21:26,279 internally versus the picks and shovels type of a platform enhanced Sirie. I always 312 00:21:26,279 --> 00:21:30,920 thought Syrien was kind of AI to begin with, to a degree. Yeah, 313 00:21:30,039 --> 00:21:34,039 she was like a dumb AI. Yeah, who do you think is 314 00:21:34,119 --> 00:21:38,839 dumber Alexa or yeah, Rosie the robot you got one from like like a 315 00:21:38,920 --> 00:21:44,960 series a high school dropout and Alex as a college drop out, right right 316 00:21:45,200 --> 00:21:48,319 right right. I think that there's there's opportunities still in the major players. 317 00:21:48,599 --> 00:21:52,319 I don't know if they've washed out most of the profitability over the next two 318 00:21:52,400 --> 00:21:56,240 or three years already though, you know, if we consider some of the 319 00:21:56,240 --> 00:22:03,160 next gen on video, the Blackwell format and and platform or technology, and 320 00:22:03,200 --> 00:22:07,240 we look at that, you know, interesting, uh they you know, 321 00:22:07,279 --> 00:22:08,599 they seem to think it's going to be a I don't know, three or 322 00:22:08,599 --> 00:22:15,319 four time revenue multiplier compared to the current product line. And maybe but if 323 00:22:15,319 --> 00:22:22,279 we take the idea that which which happened actually years ago with Dell, when 324 00:22:22,359 --> 00:22:26,599 Dell was skyrocketing back in the early days, and we looked at the you 325 00:22:26,640 --> 00:22:30,759 know, the thirty fifty year of and year year of a year sales growth, 326 00:22:32,119 --> 00:22:33,480 how many years does it take till you're like, wait a second, 327 00:22:33,920 --> 00:22:37,599 we can't continue that pace of growth because if we did, everybody will have 328 00:22:37,680 --> 00:22:44,200 like five PCs on their desk, and who needs that? Yeah? So 329 00:22:44,319 --> 00:22:47,160 true. So I think some of the some of the play is over till 330 00:22:47,160 --> 00:22:49,240 we get next GENU to see where we go from here. I think everybody 331 00:22:49,240 --> 00:22:53,319 wanted in, everybody hopped on, and now I think they're slowly. We've 332 00:22:53,319 --> 00:22:57,319 seen a couple of days that things are starting to turn a little bit and 333 00:22:57,359 --> 00:23:00,519 that they're there and everybody still upgrading. Oh yeah, it's still upgrading. 334 00:23:00,519 --> 00:23:03,519 So they're still you know, head over heals with this. I'm listen, 335 00:23:03,519 --> 00:23:07,079 we get two weeks from now, do we see the earnings. So let's 336 00:23:07,079 --> 00:23:10,200 see how this plays out, how this shakes out? All right? All 337 00:23:10,279 --> 00:23:14,279 right? Hey, so yeah, we we don't really know what's going to 338 00:23:14,319 --> 00:23:18,440 be. One final question on market Tesla. What's your take on Tesla? 339 00:23:19,039 --> 00:23:22,039 Is that it just an ice stock, She's an AI stock. I mean, 340 00:23:22,039 --> 00:23:26,880 it's a the Tesla as an EV play. Let's you know, look 341 00:23:26,880 --> 00:23:30,799 at that versus Tesla as he has a lot of other stuff, a musk 342 00:23:30,839 --> 00:23:33,119 play and these difference is right? Does that? Yeah? That different? 343 00:23:34,119 --> 00:23:37,279 You know, MUSC will do everything you can to burnt shorts. I mean, 344 00:23:37,319 --> 00:23:40,680 obviously there's a recent rally from where we've been to from what one fifty 345 00:23:40,680 --> 00:23:45,400 six to forty something over the last few weeks. Yeah, on the better 346 00:23:45,440 --> 00:23:48,720 than expected sales numbers. But yet the robo task has been pushed back, 347 00:23:48,799 --> 00:23:51,920 which will be pushed back again, and by the way, it's gonna be 348 00:23:51,960 --> 00:23:55,799 pushed back again from there, you know. But I think I think that 349 00:23:55,799 --> 00:23:57,319 that uh, you know, you don't want to bet it. First of 350 00:23:57,319 --> 00:24:00,160 all, you don't want to bet against Elon Musk and Milga Starlink. That's 351 00:24:00,200 --> 00:24:04,400 just fascinating. A SpaceX fascinating, right, A guy that can build company 352 00:24:04,400 --> 00:24:07,640 of the company of the company and make you know, every company's billions, 353 00:24:08,000 --> 00:24:11,039 right. You know, we're not just talking about starting something like Hey, 354 00:24:11,240 --> 00:24:15,359 I think it's worth a million. It's worth like twelve billion to start. 355 00:24:15,599 --> 00:24:18,839 Uh, pretty pretty unbelievable. I think Test is probably if we look at 356 00:24:18,839 --> 00:24:22,319 as a car company, they're a little bit spent. There's a lot more 357 00:24:22,799 --> 00:24:27,559 uh, competition, Hybrid's coming on strong. China sales are down significantly better 358 00:24:27,599 --> 00:24:33,039 than expected recently, but still down significantly big. You know neou by d 359 00:24:34,160 --> 00:24:37,680 In India, you have companies now that are pushing. Actually, I just 360 00:24:37,759 --> 00:24:42,200 saw, uh, what's the name of the Indian company. I don't remember 361 00:24:42,200 --> 00:24:48,359 the name of the company? They vifest in infest Uh is the Indian company? 362 00:24:48,400 --> 00:24:52,440 The electric vehicle company. Uh, there's a dealership right here Fort Lauderdale. 363 00:24:52,559 --> 00:24:53,599 I was like, yeah, that's pretty cool. You don't see any 364 00:24:53,680 --> 00:24:57,200 Chinese cars here, you know, you'll see anything. We have a Lucid 365 00:24:57,519 --> 00:25:02,559 in West Palm Beach, A loose dealer, right, Pluster you're probably a 366 00:25:02,559 --> 00:25:06,720 pollstar. Yeah, poll stares kicking around, they're barely it's all inside of 367 00:25:06,759 --> 00:25:10,720 Arabia keeps feeding in them. They'll be okay. But you know, the 368 00:25:11,160 --> 00:25:15,480 interesting thing is, and I'm a Tesla owner, so I've had this is 369 00:25:15,519 --> 00:25:21,559 my third one. They keep getting better driving experience wise. Nothing can approach 370 00:25:21,599 --> 00:25:23,359 it, no other ev you know, No, I agree with that. 371 00:25:23,799 --> 00:25:29,880 The eighty percent or eighty five percent now and tech wells, they're not even 372 00:25:29,920 --> 00:25:34,359 in the same arena. They're like five to ten years ahead. But that 373 00:25:34,400 --> 00:25:37,960 doesn't mean that they're going to make money. You know, all these Chinese 374 00:25:38,039 --> 00:25:44,599 companies that were so touted over the past twenty years, it was just like 375 00:25:44,640 --> 00:25:49,240 the United States leading up to nineteen twenty nine, had all these companies exploded 376 00:25:49,279 --> 00:25:52,920 on the market. They were doing amazing. There was one little problem manager 377 00:25:53,160 --> 00:25:57,319 they were really making any money. And that's what happened with the Chinese companies. 378 00:25:57,559 --> 00:26:00,920 They weren't really making any money. There's one company out there, there's 379 00:26:00,920 --> 00:26:03,359 one they have a really cool car. They went when was the company went 380 00:26:03,359 --> 00:26:07,519 bankrupt? Once in their back people buy the cars just as a backup battery. 381 00:26:08,119 --> 00:26:11,440 Yeah, yeah, I've seen that. Yeah, I didn't hear about 382 00:26:11,440 --> 00:26:15,640 that, but it makes this is uh one with an F. I think 383 00:26:15,640 --> 00:26:18,119 it starts not not fair to the other guy. It's fair. It'screir. 384 00:26:18,200 --> 00:26:19,880 Yeah. But people buy the Fiskers for the batteries because but they're out of 385 00:26:19,920 --> 00:26:22,880 business. It's like twenty grand and you just have a whole house battery. 386 00:26:23,240 --> 00:26:27,759 Yeah, hey, the batteries. You know that there's so many applications. 387 00:26:29,000 --> 00:26:34,759 Hey, you know when you look energy that Tesla's building those uh those megapacks 388 00:26:34,759 --> 00:26:40,039 as they call them, which you know won't solve the energy problem. But 389 00:26:40,759 --> 00:26:48,160 if you go out west on Southern Boulevard in Florida, that's west from West 390 00:26:48,240 --> 00:26:52,839 Palm Beach and you get to like the sugar plantations, there are about ten 391 00:26:52,920 --> 00:26:59,440 or fifteen peaker plants there. The only purpose of those plants is to go 392 00:26:59,519 --> 00:27:07,160 on line when they're short of capacity, when there's not enough electricity. Otherwise 393 00:27:07,160 --> 00:27:11,599 they're off all the time. They just shut down so the megapack can get 394 00:27:11,720 --> 00:27:15,880 rid of a lot of them, which I find kind of fascinating it. 395 00:27:15,200 --> 00:27:18,680 You know, people don't really understand the electric industry. I've studied it my 396 00:27:18,759 --> 00:27:23,720 whole life, and I've had people on guests for you know, who are 397 00:27:23,759 --> 00:27:27,240 major players in it. I kind of get it, and it seems to 398 00:27:27,279 --> 00:27:33,160 me these electrical utilities are going to clean up for me AI more than anybody 399 00:27:33,240 --> 00:27:36,119 else. I would agree. I picks and shovels, right, I mean, 400 00:27:36,119 --> 00:27:38,920 you got you got any uh you got yet if next year was FPNL 401 00:27:40,000 --> 00:27:44,079 down here, yeah, CMS, you got h Southern Southern uh, and 402 00:27:44,119 --> 00:27:48,119 you get all these companies and the mini UH and the anything with nuclear related. 403 00:27:48,240 --> 00:27:52,279 If in fact, we need to have these gigawatt facilities that Intel's building 404 00:27:52,279 --> 00:27:55,880 and this one's building and that one's building, the energy consumption is absurd. 405 00:27:56,160 --> 00:28:02,640 Yeah, fifty thousand homs one one one data center is fifty thousand, the 406 00:28:02,680 --> 00:28:06,279 one the one that the Intel's doing is two undred and thirty. Yeah, 407 00:28:06,359 --> 00:28:10,880 so even in thirty thousand homes, I mean like building a city. So 408 00:28:11,079 --> 00:28:15,279 the utilities, A, we're not going to have enough electricity. We're going 409 00:28:15,359 --> 00:28:19,400 to have to tap into every available source, which means coal, whether you 410 00:28:19,519 --> 00:28:25,359 like it or not. And b uh the profits of these companies are going 411 00:28:25,440 --> 00:28:30,799 to be enormous because they're so high fixed. The capital companies and it, 412 00:28:30,960 --> 00:28:34,519 you know, to get approvals through for a power plant takes years, so 413 00:28:36,480 --> 00:28:41,079 you know it's just going to explode the whole thing. And what do utilities 414 00:28:41,119 --> 00:28:45,240 do. Why do old ladies, widows and orphans love them because they pay 415 00:28:45,240 --> 00:28:51,559 out a substantial amount of their profits in dividends. Right, So that could 416 00:28:51,599 --> 00:28:56,880 be the Pickbax the miners here, I data, yes, the brothels, 417 00:28:56,240 --> 00:29:02,160 yeah, the brothels, and the the the bars and the casinos. Don't 418 00:29:02,200 --> 00:29:11,079 forget the parts where the casinos back so exactly, and especially down south here 419 00:29:11,440 --> 00:29:15,400 where you have population growth on top of it. And if you watched mister 420 00:29:15,480 --> 00:29:22,119 Wonderful, he said he's not building any data centers in the formerly Great State 421 00:29:22,200 --> 00:29:26,720 of New York, the former Empire estate because you don't like the legal system. 422 00:29:26,759 --> 00:29:32,440 And I think a lot of people following course there. So that means 423 00:29:32,440 --> 00:29:37,079 the southern utilities are really set to capture a huge amount. And if they 424 00:29:37,079 --> 00:29:41,960 have any spare capacity, and it's hydro or whatever, I would venture to 425 00:29:41,960 --> 00:29:48,799 say, you will see power plants being built in the Dakotas from all the 426 00:29:48,880 --> 00:29:53,319 gats that they can't use, and they'll ship the power off to the Midwest 427 00:29:53,400 --> 00:29:59,319 or wherever I would agree are data centers. There no tax in the North 428 00:29:59,359 --> 00:30:03,079 Dakota perfect. So so it's not all doom and gloom. Then, no, 429 00:30:03,559 --> 00:30:07,359 not all doom and glue. There's something there, but not all Yeah. 430 00:30:07,440 --> 00:30:11,880 Hey, my former law partner used to say, carry the situation is 431 00:30:11,039 --> 00:30:15,480 hopeless, but never serious. Right I like that, Yeah, I like 432 00:30:15,559 --> 00:30:19,200 that. So hey, and Florida is still kicking ass. Right, that's 433 00:30:19,279 --> 00:30:25,000 right. So it's right. And other states Tennessee can't believe the growth state 434 00:30:25,039 --> 00:30:29,160 of Tennessee. And people don't move to avoid taxes, they say, right, 435 00:30:29,480 --> 00:30:32,599 yeah, I have several friends that move from New Jersey, and I 436 00:30:32,640 --> 00:30:34,720 got to tell you that they keep on telling me the instant raises they get. 437 00:30:34,720 --> 00:30:38,519 I'm not paying the city in state taxes that they have to pay in 438 00:30:38,559 --> 00:30:41,200 the New York me measure area, New Jersey, Connecticut. You know that 439 00:30:41,240 --> 00:30:44,960 whole area. I know. I moved here from New York and it was 440 00:30:45,000 --> 00:30:48,759 twelve years ago, and then it was a lot cheaper than it is now. 441 00:30:48,559 --> 00:30:53,359 Prince was cheaper, Everything was cheaper, and you know, the taxes 442 00:30:53,400 --> 00:31:00,319 were like twenty percent of the New York's real estate crazy crazy, yeah, 443 00:31:00,440 --> 00:31:03,880 nuts. So all right, hey, just tell us again where we find 444 00:31:03,880 --> 00:31:07,519 you, how we subscribe? Sure, go over to We have two podcasts 445 00:31:07,599 --> 00:31:11,400 right the run instance seven The Disciplined Investor. You can find that on all 446 00:31:11,480 --> 00:31:15,599 the important podcast repositories apps, et cetera. Dhum Plugged is another one which 447 00:31:15,640 --> 00:31:19,680 I do with John C. Devorak Tuesday night. We do it live also 448 00:31:19,759 --> 00:31:23,680 to tape. And then The Disciplined Investor dot com. You can find everything 449 00:31:23,680 --> 00:31:26,559 on there on how we manage money, what we do the podcast all sorts 450 00:31:26,559 --> 00:31:30,240 of good stuff. Cool. All right, Hey, the link is in 451 00:31:30,279 --> 00:31:33,559 the show notes of this interview on Financial Survival Network dot com. While you're 452 00:31:33,599 --> 00:31:37,799 there, please sign up for your free newsletter. Appreciate you coming on, 453 00:31:37,000 --> 00:31:41,960 Andrew. It's been a pleasure talking about all this stuff. That is like 454 00:31:41,519 --> 00:31:45,119 because I like getting into weeds. I like to really look and I like 455 00:31:45,160 --> 00:31:51,599 to get different viewpoints on what is really happening, because nobody really knows what's 456 00:31:51,640 --> 00:31:55,119 happening. You know, you know your little confusing planet, but you don't 457 00:31:55,160 --> 00:31:57,519 Runny know all the others. And hey, if you got a question for 458 00:31:57,640 --> 00:32:01,960 Andrew or myself, shoot me an email kl at Carrie LUTs dot com. 459 00:32:02,039 --> 00:32:05,920 Andrew, We're not gonna let so much time go by this time. Yeah, 460 00:32:05,920 --> 00:32:08,400 I appreciate it. Absolutely Thanks so much, Kerry, thanks for listening 461 00:32:08,440 --> 00:32:15,599 to Carrie Letz's Financial Survival Network, your solution to today's trying times. For 462 00:32:15,720 --> 00:32:22,359 the latest, go to Financial Survivalnetwork dot com. Financial Survival Network now more 463 00:32:22,440 --> 00:32:22,960 than ever,