Speaker 1: Hey guys, I am volunteering with youth, meaning that for
the next three nights I will sleep about two and
a half hours. Praise God for a chance to do this.
I'm sharing with you a podcast that my dear friends
and brother, Zach Gabraham creates. It's at Know Your riskpodcast
dot com. He's here every Friday. Fact it's during this
quote time slot. So I thought it'd be really interesting
for you to see Zach doing his thing unhampered by me.
So we'll do this right now with the help of
Bulwarkcapital Management, Your Riskpodcast dot com and s Gottamney Zach
Your Turn.
Speaker 2: The opinions expressed in this program are for general informational
purposes only and are not intended to provide specific advice
or recommendations for any individual or on any specific security.
It is only intended to provide education about the financial
industry to determine which investments may be appropriate for you.
Consult your financial advisor prior to investing. Any past performance
discussed during this program is no guarantee of future results,
and this is referenced for comparison or unmanaged and cannot
be invested into directly. Any references to performance of securities
are thought to be materially accurate, and actual performance may differ.
As always, please remember investing in Volve's original.
Speaker 3: And we are back with another edition of the Daily Dots,
and I'm joined as always by the brain Trust himself,
mister Chase Taylor. And wouldn't you know it, Jim Kramer
finally comes out and says it's time to buy everything uranium.
And I was doing another interview on another podcast today
and I got asked about this and I just broke
out and laughter. Took probably a good five to seven
seconds to pull myself together. And the guy's like, what's
so funny? And I go, well, and you and I
were on this trade together. But I remember my first
foray into Camico was about five years ago, for if
I want to remember correctly, right around eight and a
half bucks. Right, Jimmy jumps on the train when Camico
hits seventy two, a nine X return, literally a nine
x return, then he's interested.
Speaker 4: Yeah, now that the evaluation is actually pretty stretched, it's
go Tan.
Speaker 3: You can't make it up. This is the same cat
this said. And I'm not just trying to beat on
Jim Kramer. The reason I think that these things are
helpful is because I think he is emblematic of so
much of the market. Right, It is so similar to
t rex.
Speaker 4: Yeah, I only see it if it's moved.
Speaker 3: Yeah, that's right. There you go, it's a t rex.
That's a good one. It's so similar to oil being
uninvestable at eighteen dollars a barrel.
Speaker 4: I'll never forget that one feature that tweet in my
big rite up about oil back in twenty twenty.
Speaker 3: So you and I spoke that day or the night
after he said that, because I remember a conversation specifically
where I was like, we're going to increase our oil holdings,
like literally because he said that, where I was just
like that, Riddy. It just reiterated to me, wait a second,
you're probably never going to get a chance to buy
oil this low again for ever, maybe ever. I mean
other than one thing.
Speaker 4: I always when for a monthly negative, I mean, that
was just the ultimate sign, and that's when it's investable.
And that was when everyone was so sure it was
in deep trouble. I still have save save screenshots from
that period of some of the craziest stuff people were saying,
like so like even I.
Speaker 2: E a e.
Speaker 4: I A like all the big all the big boys,
you know that that forecast demand where like they said,
like demand had reached its peak for the rest of time,
like you would never have a higher demand print. I
just remember being like what.
Speaker 3: The same people said, supply had reached its Matt, I
still remember peak oil.
Speaker 4: I remember peak coal and coal is still growing.
Speaker 3: Yeah. Yeah, And and like I said, I don't point
that to blast people or to make fun of them.
I point I point that out because value investing or
investing for fundamental purposes has become much maligned and for
a lot of understanding. Yeah, for a lot of understandable reasons. Right,
But it doesn't change the fact. One simple fact is
buffer reminds us all the time is the number one corollary,
the number one determinant of your investment outcomes is the
price you pay. And investing should be a game of
buying the thing that nobody wants that they're eventually going
to need.
Speaker 4: Right. It's the reason I use the certain chart pattern
that I use because it captures it captures that like
fundamental backdrop on chart.
Speaker 3: Essentially the other thing. Really interestingly enough, especially I think
as it relates to commodities. Is we still own uranium,
but we don't own it anywhere near the size that
we had. And why because you've reached a part a
price point here where. Look, it wasn't fun owning the stock, Okay,
like I will admit that, but from a fundamental level,
when you're buying good uranium minors back when the market
the price was twenty seven bucks a pound and the
cost of production with sixty.
Speaker 4: Like yeah, and it's not just rainy either, like you
now that you have the nkz ECF to capture the
industry players, the SMR guys all that stuff. So if
you go, if you go look through like a momentum
screen right now, it's capturing all that stuff. Yeah, So
any momentum book is going to have a bunch of
SMR companies and like power producers in the nuclear space.
So it is one of the hottest corners of the
market right now. Is that whole that whole industry. So
it goes from no one even knows about it a
couple of years ago to like hot, hot, hot part
of the market. And most of those SMR companies are
pre revenue just you know, they're they're a science experiment
that most of them won't won't work, But yet people
are throwing large money at them.
Speaker 3: Stupid amounts of money. And I don't, I really do
not believe that that game is on, and I don't
think we're going to relive that again. And I think
there's several different dynamics, but I think that again, it's
not like everybody you know had a powow and decided
we're going to start looking at things rationally. I just
think you reached this break point now where you're looking around, going, guys,
when you look at some of the valuations out there
and you look at what it is, right, We're not
talking about crap companies with crap multiples, come about just
great stuff out there that because it has been so ignored. Look,
there will be irrational price moves. I mean Tesla's is
a crack classic example. Tesla announce that deliveries down another
thirteen percent this year in the stock rally five percent. Now,
it did that the exact the exact same thing the
last time it about and announced a bad quarter. What
I'm saying is you want to kind of like warrant
investors that, guys, I think this market is in the
problems of getting back to some form of normalcy that
more resembles what investing is, as opposed to just being
a popularity contest, you know, and like you said, just
everybody being a t Rex, just chasing what moves right.
That's been the winning combination for a while. I don't
think we're there anymore. And you know, I think we're
kind of getting back to a little bit more of
a traditional place where I think the big opportunities are
finding the things that are just irrationally cheap that nobody
wants for no good reason. I mean, we were just
lamenting one of the oil companies that we own. I mean,
you look at this thing. Financially, the thing is a
stalwart I mean fortress balance sheet, massive amounts of cash flow.
And while we're sitting there, the stock hasn't done anything
except frustrat us. But it's paying a fourteen percent dividend
for God's sake, you know, like when I'm buying deep
value and something like that, and I'm getting a fourteen
percent dividend that I feel very confident they can defend
because it's not pressing their free cash flow at all.
It's hard to lose on an investment like that. You know. Meanwhile,
you want me to speculate on something like Tesla, the
car manufacturer, trading at one hundred and eighty times earnings.
It's rallying five percent because deliveries are down thirteen.
Speaker 4: And they're going to fall two years in a row.
Speaker 3: Yeah. The other thing too, is we didn't pull our
short on it. Now. I might after tomorrow. I might
after tomorrow. But if it's like the last time, same
thing happened. When you see a company with a multiple
like that rally on bad news, I'll take my chances
on the short side. Now, watch, I just made sure.
I'll probably check after hours. It's probably up ten percent
and after hours.
Speaker 1: There's movies that do horribly, but Hollywood continues to make them.
There's a formula that Hollywood knows does not work, and
they continue to produce them. Hollywood understands that when stars
in Hollywood get up and give politically leftist speeches at
award shows, it does not work. It does not in
dear audiences, it does not grow the footprint of a movie.
It does not help with distribution, it does not help
with uptaker views. They know this this.
Speaker 4: They are a fact.
Speaker 1: That they continue to do it. They know and have
felt for years that they have a lock on which
movies get made. Yeah. Sure, there's some independent the independent
production companies, and eventually they get bought up. Mir Max
was once independent, Sun Dances once independent. These things get
all bought up and gobbled up. I don't think that's
where Angel Studios has headed. In fact, they don't need
to get gobbled up. They become so successful with movies
like Sound of Freedom, their Connection with The Chosen, The
King of King's movie that destroyed snow White at the
box office because it's about the life of the Lord
Jesus Christ in an animated feature. So they're doing something
that's a different incentive. Angel Studios is bringing us on
the inside. The incentive changes. We now vote on which
movies they accept for production, they make, their release, and
they promotes. We are a deciding factor in this. That's
a massive change. So if you pay for any media
subscriptions at all, you should pay for becoming an Angel
Studio Premium Guild member much more than stick in Netflix.
Speaker 3: Are you kidding me? So go join up.
Speaker 1: It's angel dot com slash todd. You will get to
vote on the movies that they release and promote and distribute.
You will get two free tickets to every Angel Studios
theatrical release. You will be able to stream all their
fan curative programs immediately, including King of Kings. It's Angel
dot com, slash todd. They've created this incentive for us,
so let's go do it. Angel dot com, slash todd.
Speaker 3: But give us a rundown on indexes.
Speaker 4: So SMP closed up point four to seven, q's up
point seven, small caps and best mode up one point
thirty nine, ecoweight only at point two to three, MAX
seven up about one and a half. All world x
US up point three three. The dollar was not read today.
That's a big deal. One point one four had been
down like a million days in a row. Pretty big
day for bitcoin. You're up at one hundred and nine
thousand OLB over three percent, Oil up three percent, dollar
not down and yet gold, silver, plattinum playing copper all up.
So that was kind of notable. Gold only at point three,
but silver almost almost won, and platinum up another five
and a half, played him up four point nine and
copper almost two percent. You're up like five twenty, so
like that's it's getting interesting and when it comes to yield,
you had the two year up about two and the
ten year up four. The thirty year at one point
was like up about seven basis points today because we
had a blowout in the UK of twenty basis point
move higher in there long in, but that kind of
cooled off by the end there, and vall Is was
pretty flat on the day, down a little bit. You're
at eighteen point five six. You gotten real sticky in
the eighteen hand on front month fall.
Speaker 3: You know something interesting that I was thinking about with crypto.
If you look at just the coins, right, you're right
around three and a half trillion dollars.
Speaker 4: Right, three, yes, about right today?
Speaker 3: Start out in the market cap of the publicly traded companies,
I bet everything and all you're probably pushing toward that
four trillion dollar mark. Okay, it's digital gold. Right. If
you add up every single publicly traded gold mining company,
they traded a discount the costco. So if those things
are really digital gold, I just I can't. I've always
been a skeptic. We own a little bit of it.
All that kind of stuff, I just can't. I can't.
I can't shake the feeling that some really big carnage
is in for crypto. It's just too many people. I'm
listening to Hugh Henry, Smart investor, who I respect. I've
had him on the show before. He literally said, I'm
selling my house. And I'm sure he's being facetious, but
he was like, I'm selling my house. I'm putting everything
a bitcoin. This thing's going to ten million data DA
And I'm just like, yeah, I'm gonna call BS. Yeah,
I just I just there's too much certainty man.
Speaker 4: To listen click click farming maybe from from our our
friend in the Caribbean.
Speaker 3: Yeah.
Speaker 4: Well.
Speaker 3: The other thing too, is I sit there and I'm like, guys,
just because something has gone I mean, if we use
your rationale, like the most valuable asset that all of
us want, those toolips. Now. Granted, I'm not saying that
there's like I understand all the crypto arguments, and.
Speaker 4: Yeah, the digital gold viewpoint is not insane for bitcoin,
for bitcoin and maybe one or two other coins that
have some use case or whatever.
Speaker 3: But I just I listen to these guys talk about
crypto and I'm just like, where, how do you look
at that universe and decide that that universe has four
trillion dollars of utility where doing what I mean, what
if we added up the banks. How big is the
banking sector in the United Sticks.
Speaker 4: That's probably pretty good.
Speaker 3: Well, I bet you it's probably about twelve trillion.
Speaker 4: I can look it up.
Speaker 3: Okay, So the banking, the banking sector in the United
States that literally underwrites the world's financial system is only
worse worth three or four x the crypto universe. I mean,
just think about that. People are like, it should be
worth way more than the financial and you're like, what.
Speaker 4: It's pretty close. You're about you're about eleven.
Speaker 3: Look at that, folks.
Speaker 4: That was impressive. Yeah, he looked it up before it
came on. That's fine.
Speaker 3: Shot from the hip. No, no, it's are you kid?
Do you know how many freaking pie charts of sectors
on the SMP we're looking at constantly and you don't
have to because you're not the one that.
Speaker 4: Has to do the uh for me? It's no.
Speaker 3: Yeah, although that's not true.
Speaker 4: I've made a few for you.
Speaker 3: You have turned out, churned out.
Speaker 4: They had a research that's some research around here.
Speaker 3: I've always had this weird thing too, that for some reason,
numbers stick like I were like one of the big
jokes in the office. Now, this is when I was
really the only one bringing in new accounts. But I
could never remember a name. But I can tell you
exactly what the balance of somebody's portfolio was and everything
in it, just like I remember, you know what I mean.
I don't know. I don't know what.
Speaker 4: That's I'm a picture guy, so I can remember a chart.
I can't remember a number for anything.
Speaker 3: Yeah, weird, you can remember it. Chart shocked visual learner
should change your name to chart Taylor anyway. Uh yeah,
I just I and we own a little bit. We've
traded it extremely successfully.
Speaker 4: I mean, it's a wonderful trading liquidity proxy. So whenever
you it's crazy not to use it as a tool.
Speaker 3: Yeah, I just don't.
Speaker 4: All right, Two things, we definitely got to talk about
ADP jobs. In the Vietnam Air Quotes deal.
Speaker 3: Hit us off on ADP jobs YEP.
Speaker 4: ADP was expected to come in at positive ninety eight
thousand jobs created. It came in at negative thirty three thousand,
and more than all of that was from services job
A good producing jobs were positive, and then it was
very negative for our services, education and healthcare got hit
really hard. And if you look at that chart for
that has just gone from wildly positive to all of
a sudden a massive problem on ADP, and I would
expect that to become a problem eventually at some point
for a non farm payroll between you know, the Department
of Education issue and then what I talked about yesterday
with the potential because it's not passed yet healthcare headwinds
that come out of the Reconciliation bill, Like I could
see that kind of continuing. So well, this has anything
to do with tomorrow. Probably not, But what I will
say is if you chart ADP and non farm payrolls,
the big official one that comes out that everyone actually
pays attention to for markets, are they always the same
or close? No? In fact, monthly of the variabilities super wide,
it wouldn't be shocked if ADP or a non farm
payrolls beats tomorrow. But if you zoom out, they absolutely
trend together. So the fact that the ADP trend is very,
very ugly tells me at some point on front and
pay waves will have to gap down with it. So
worth noting even though no one else cares about ADP
that like it, it's showing a lot of softness the
other thing.
Speaker 3: With the other thing, why, I think you have to
pay attention to that. And again, you know, we'll like
we'll always say, don't ever be the Pollyanna that's freaking
out over one you know, one metric. You got to
look at it all into entirety. Concerning part about that
is that seems to meld and rhyme a lot with
the kind of things that we're seeing. Right you look
at the issues and housing. You look at that and
you're like, look, I'm not I don't see a black
hole where things need to collapse, but I see some
very very I see some very large obstructions as it
relates to continuing to add jobs.
Speaker 4: Right, clearly, it's you know, we weaken a lot. And
another thing that kind of rhymes with you know, what
you can kind of observe is the biggest weaknesses in
the smallest firms. So the smallest businesses out there are
I mean, they're under they're under a lot of stress,
they're in a lot of pain, and that that's been
that's been that way for a while. But you know,
it continues to be a pretty big gap between how
bigger businesses are doing versus small the smallest fifty or
less employees were very negative. And companies that have a
whole bunch of employees, like kind of the top you know, quartile,
dessile whatever, they added a bunch of jobs. So that's
kind of a nasty you know split.
Speaker 3: Yeah, But then you're seeing prints from like Microsoft laying
off another nine thousand, right, that's a lot. That's a
lot for Microsoft for for.
Speaker 4: A company that's growing.
Speaker 3: You know, Well, that's what I'm saying. And you're talking
about AI positioned, right, you're sitting there going I just
I think, you know, I think, in my opinion, I
think they're looking out and they're probably seeing a lot
of the same things we are. I think they see that,
you know, the sailing isn't going to be quite as
smooth and easy going forward. I think there's a lot
more risks. I think that, Yeah.
Speaker 4: I And it's also it's one of the reasons you
can't count out really crazy right tail stuff from tech
is you know, they're already very employee light companies. They've
been growing, their earnings, growing and their margins and you know,
keeping headcount flapped down, which is wild.
Speaker 1: But your bank by the way, your bank is incentivized
to never give you real corporate credit. Why would they?
Why would your bank want you to have a business
with its own credit line, completely divorced from your house,
your savings account, your retirement accounts. Why would they want that?
Why would they want you to have the safety that
they enjoy? Go look at the setup of your bank.
Do you know how hard it would be for you
to sue an individual at your bank? No matter what
they did, you'd have to sue the bank. They know
that they need to have a firewall between themselves and
the bank. Do you think it's easy to sue a
member of the board of directors or the CEO of
a bank. Nope, Because they're set up as actual corporations
with their own credit line, but they don't tell you
about that. I had a friend of mine who signed
up for Visible because she realized that she and her
husband owned rental properties that they're paying. You know, they
have mortgages on and it occurred to her that though
her lawyers set that up, though her accountants set that up,
she went and looked, that's not corporate credit. All that
stuff is resting upon her and her husband's hard earned
retirement monies. So she went to gobisible dot com. That's
g O B I, Z A B l E dot com.
Go bizible dot com and in seven easy steps they
helped her get this going, so she has actual corporate credit.
Speaker 4: They'll do the.
Speaker 1: Same for you. There's a few things you do online
on your own, but they make you this guarantee. Go
take them up on their free now obligation consultation at
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your business. I've done it, I did, and.
Speaker 3: You will too.
Speaker 1: It's go bisible dot com. Go bisible dot com.
Speaker 4: The other thing I definitely wanted to talk about is
we had sort of a deal announced today with Vietnam
trade deal. It's definitely light on details and maybe they
are or are not forthcoming. We don't know, but what
we do know that what they got announced was that
they're going to have no tariffs on our stuff. We're
going to have a twenty percent tariff on their stuff
and a forty percent tariff on anything that we deem
to have been transshipped from China through Vietnam. So I
would to be conservative, let's call that a twenty five
percent effective tariff. Rate, and it may end up being
closer to thirty or something because they do tranship a
lot of stuff. Nobody knows who's who's responsible for determining that,
how they're going to do it, all that kind of stuff.
Speaker 3: But you know, if those tar if those tariffs like
at that level ten to twenty percent, if they apply
to things in a broader sense, like, for instance, if
they have applied to automobiles, that might offset like Elon's
loss of subsidies here in the United States.
Speaker 4: All right. The problem with that is is if I'm
understanding what you're saying, is, you know, having Vietnam's a
tiny market.
Speaker 3: Our subsidies make his cars less expensive to buy in
the United States. If you remove those subsidies away, but
you flip them over on tariffs to you know, foreign
cars coming into the country, you know, you could have
a wash.
Speaker 4: We already have a twenty five percent tariff on all
cars okay into the country period because that's one of
the two thirty two's. So what's important to me here
is like there's been a lot of debate about are
tariffs just here for negotiating or are they going to stick?
Like are we going to have you know, ten to
twenty percent effective tariffs moving forward, or you know, maybe
even a little higher or whatever. And there's there's been
obviously multiple camps. Some people are like, oh yeah, like
we'll basically barely have any tariffs. Once it's all over,
we get all our deals lined up, the tariffs will
basically be gone, and then we have the reciprocal argument
of like you take yours our ears down, we'll take
ours down. Well, now we have this deal, that kind
of that might be you know, a template of you
took all of yours down and we still are keeping
twenty five And I mean, if to me, in my opinion,
if you've listened to the administration, that made it very
clear this is the way it was going to go down.
Senator Kennedy was grilling Lutnik about this in Congress, where
he asked them straight up, hey, if they if you
know this country. He may have even said, Vietnam pulls
down all trade barriers to zero, nothing, there's no tariffs,
no non tariff barriers, nothing. What we pull ours down too,
And he's like absolutely not made it clear like we're
going to keep tariffs. Part of it is because like
we we would still have a trade deficit, and we
It's almost like just viewing a trade deficit is bad
on its own. So this looks like a zero and
a twenty five for Vietnam. The zero doesn't do much
for us because it's the tiny market. We're not going
to sell a bunch of stuff in Vietnam. But keeping
that twenty five is going to be a meaningful number. Now,
it's kind of like naftin reverse, Like the Nikes of
the world were up today, meaning they That tells you
a lot of people thought this could be worse. So
that's me. That's it's notable. Maybe the people are just
happy that it's over and they can pencil out the
math or whatever.
Speaker 3: But you're also just gloating because we bought Nike on
your recommendation.
Speaker 4: Yeah, well it wasn't because I thought anything about a
Vietnam deal. I can assure you that if anything, that
scares me. But but it's it's notable, like Lulu was.
I mean, Lulu didn't have a great day, but like
you know, they do some manufacturing in Vietnam, and once
the news hit, it jumped, so you could see people
that make things Vietnam, Like clearly the market thought this
could be worse. But plus, those things don't get transhipped
the way a lot of other things do.
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Speaker 3: The interesting thing about this is I've now lived long
enough to see great. It's not perfectly offsetting, but it's
similar because you're dealing with different sides of the debate. Right,
I'm old enough to remember the NAFTA situation very clearly.
I still remember when Ross pro stood up there on
stage and said you're gonna hear a sucking sound, right,
And I remember being very uncomfortable, unsure about where I
stood on that. And we talked about this on the
show before, right, because I'm mister free markets and all
that kind of stuff, and you flip around today and
we're putting on tariffs on trading on countries or trade
with which is literally the inverse of what we did
in NAFTA. And there's a part of you that feels
that same sense of like trepidation, you know, because I
believe in free markets. Tariffs are not that. Yet at
the same time, free markets have been really and not
just by everybody else. I mean we're guilty of it two,
but have been really massaged and very manipulated, right, And
you know it's it's there's a again, there's still a
part of me that really likes free markets. But then
there's a part of me that sits there and says,
you know, giving countries access to our markets isn't isn't
the worst thing in the world if the levels aren't
too big. But it's also one of those things like
with NAFTA, where you're sitting there going, I'll be honest
with you, I don't really know how I feel about it.
I don't really know how I feel. I mean, I
feel like I could make really cogent arguments on either
direction to me.
Speaker 4: To me on this one, I do know how I feel.
And that's it's that you stay as free and as
open as you possibly can, because that's I mean, frankly,
where the best outcomes come from. You look at global history.
Speaker 3: Yeah, but the last thirty years would say the opposite.
Speaker 4: I don't think that's necessarily true. But but what is
clear to me is, like, you don't allow chase.
Speaker 3: You don't think our trade policy has led to the
fact that we're one hundred and thirty percent debt to
GDP and the and the Bible Belt is now the
rost belt.
Speaker 4: I mean, come on, so you could bring back all
that manufacturing production is going to be mostly robots and
stuff anyways, Like I so you're looking at one side
of it. The other side of it is look at
all the capital that came here, and look what that
capital did for us.
Speaker 3: Agreed. But the problem the other issue you have, though
is and a lot of those people got capital can
leave a lot of yacted.
Speaker 4: What is the unemployment rate in the US? Yeah, it's
four point So so where's the damage?
Speaker 3: You know? Well, I mean the dam I mean you
could sit there and go we went fifteen years without
substantive rage Wait increases, I mean that's you know that
that kept inflation low, which, yeah, but what I'm saying
is that if you go fifteen years without substantive increases
in wages, it tells you that the middle class is
getting pinched. And now and now who gets to pinch
the heard?
Speaker 4: This goes back to me, This goes back to Kev's argument.
Though the pie has grown immensely in America in this
in this time, how that pie is divided has has
become a nasty split two different directions, right, Yeah, and
I think trade policy it's part of that. But trade
policy isn't the only policy that that determines how a
pie gets chopped up hundred percent?
Speaker 3: Yeah, no, I agree, one hundred percent. Right.
Speaker 4: The point I was about to make, sorry is this,
this is like.
Speaker 3: So many other things that we're talking I don't don't.
I want you to remember your point. I got it,
But this is like so many other things that we've
been talking about lately, where it's like when we're dealing
with all of these things, what we're effectively doing is
we're talking about one symptom and we're not talking, we're
not having the broader conversations we we I believe very
much we're in a fourth turning type of period of
time and the tweaking at the edges that we've been
able to do for the last fifty years, I don't
think it works anymore. Meaning I think what it's calling
for is broader structural reform.
Speaker 4: Right. So what I was gonna say is, to me,
what's clear is like just pure free trade on it's
left of its own devices you have, you will be
gutted in areas that you cannot allow yourself to be gutted.
So obviously, I mean, we just cut off cut off
some some military supplies to Ukraine, right, not for political
Ukraine war reasons, but for like ooh, you're running low. Yeah,
So like that tells me something about the defense industrial base, right, So, like,
can you lose competitiveness in that? No? Should you lose
your ability to make you know, food and clean water
and medicine and electricity and like stuff like that. No,
you better, you better take care of the basics.
Speaker 3: Right.
Speaker 4: It's almost like a Maslow's hierarchy of needs for a country.
Take care of the base of the pyramid. If you
have to put up walls to protection and make sure
that that is sound, do it. But now, if you
look over at Vietnam, we're gonna pay a twenty percent
tariff on nikes. Should we manufacture socks and sandals in
America we eaten shoes? No, Like that doesn't make any sense.
So my argument would be, and this is frustrating because
like I know, there's people administration like JD that has
talked about this, like like hey, like let's carve out
the strategic stuff. But there's nothing strategic about shoes or
you know, jump ropes or whatever that we're going to
have a twenty percent consumption tax on. So that that
part I don't love.
Speaker 3: Now I think I think Vietnam, I mean, so we'll
see it way it rolls out, because I think Vietnam
is a little bit different because there is that back
alley action that was happening a lot where you're trying
to shipping things through Vietnam, and you can argue that
the you know, so maybe your argument would be then
then keep that carve out on.
Speaker 4: My argument would be, forget, forget country level tariffs, forget
look at forget look at the strategic thing line tariffs
of like everyone has to pay at least X percent.
I no, no, no, like that's how we're gonna do this.
It's going to be like, here are the ten things
we've deemed to be too important for our country, and
on those what I would do is have a quota system,
so like, hey, in America, we will make at least
x percent of blank and whatever we got it. You
can have like a subsidy system that throttles up and
down to make sure it gets there, a combination of
subsidies for domestic production of blank and tariffs against the
importation of blank, so that we can at least hold
a certain capacity to make it. That's the way I
would approach it.
Speaker 3: Like for like, for instance, if you have radar laser
guided you know, munitions like you know, patriot missiles, things
like that, you should probably have the domestic capability to
print the chips that make those weapons system.
Speaker 4: The chips, the magnets obviously kind of hot topic, uh,
you know, the the the inputs from you know, the
actual commodities themselves, you know, and.
Speaker 3: That in and of itself could provide a lot of
a lot of additional jobs here in the United States.
Speaker 4: It would like and it would be inefficient and like uneconomic,
But there are you know, you have to carve out
a few areas where it's like who cares how inefficient
it is, like, because if you don't take some of
these things for like seriously enough, then none of nothing
else matters. Like you know, you can't defend yourself. Then
what are we talking about?
Speaker 3: Well, yeah, and then you've got to look at the
like the changing way the world works too, right, Like,
so you know, this isn't World War two anymore where
you can just mobilize, you know, the entire economy and
get everybody. You know, it's it's it's so much more diverse,
it's so much more highly specialized. You know, you could
flip an automobile manufacturing plant into a plant that could
make airplanes. You can do it pretty quick.
Speaker 4: Right, you can't do that anymore, and you can't do
that with Yeah, and you can't just tell you know,
somebody to go make chips. It's like the most complex
thing in the world.
Speaker 3: Yeah, now, great, thank god, we've got that facility going
into down in Arizona.
Speaker 4: Multiple facilities now and to include other states. In fact,
maybe one of the only things that's super good in
the bill that's coming through is they they've upped the
the subsidies forward for chip plants, so like you'll get
even more. Yeah, and that's a have to we're gonna
do too much and have over capacity and kind of
but it's that one's important to you know, we got
to get that right, you have to like that's again
if it's inefficient, you make too many or like whatever,
like just deal with to consequences.
Speaker 3: Not having chips in today's warfare is, to me is
a very similar situation that Japan was in World War two?
Right have it literally having no oil or energy production
of their own, right, meaning I look at chips. Chips
are like today's oil.
Speaker 4: I think a few things are. Yeah, even magnets, I
mean yeah, Fords is sitting there and Twitter in their
thumbs because they can't make cars because the magnets like yeah,
just and there's no there's no easy button to fix it.
So like you you know, it's a multi year lag
between you being able to do it for yourself and
needing them from China. And you know, so what what
what scares me from a like taking this too far?
The other way standpoint would be like a real autarctic
thing where like let's be self sufficient and just about everything,
because that's where that's where you go too far and
you you kind of blow out the the free traders
take the Ricardo stuff too far, and it's like, whatever
is the most efficient you do that, you know, But
you can go the other way and it's like, let's
let's be self sufficient in everything, and it's like that's
a great way to completely ruin an economy of the country. Yeah,
and you know, the well.
Speaker 3: It's like so many other things that we talk about today,
and and all too often it's not always the case,
but all too often it is. What's the right position?
I'm not exactly sure, but it probably lies somewhere in
the middle of those two extreme thoughts.
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Speaker 3: Right, and that is very much the case now, right.
It shouldn't be an all or nothing proposition. Tariffs will
not make us rich. Right. At the same time, there
are certain things that we need to tariff to make
them viable to manufacture. Here, I and I you know,
you and I raving this conversation earlier. The thing that
I lament the most about today is that the rhetoric
is so hot you can't have a realistic conversation, right,
you know, I mean that that's the part of it
that just really frustrates me. And I hear so many
people talking about surface problems and I'm like, guys, you
can try to address that problem all you want, but
if you don't deal with the foundation issue down here,
it doesn't matter.
Speaker 4: Root cause analysis is a lost lost art, especially in politics.
Speaker 3: I was God, dude, it's so I it just it
makes me want to pound my face against my desk.
Speaker 4: And almost everything you know, government does creates a new
problem they have to fix it's and then you know,
they break your leg and then they sell you a crutch,
and then they brag about the crutch. And we're talking
about the Medicaid stuff this morning, and that's it's an
example where the reforms to Medicaid create problems. So like,
I'll give them credit. The solution is in the same bill.
But it's like, all right, we're gonna, you know, cut
back on how much money we give the states for Medicaid.
And then you know, some people were like, well, hold on,
that's going to like totally ruin a bunch of a
bunch of rural hospitals, and like, oh yeah, darn well,
let's just make like a multi billion dollar rural hospital
bailout fund that we can give them money out of.
So like, that's all in the bill. And it's like,
so you have in the same bill created created a
problem and then tried to solve it, and then naturally
that will could create its own problems and well no, yeah, and.
Speaker 3: Then you're solve is the exact same type of thinking
and solution that put us in this place in the
food right, Yeah, just throw money at it, whereas what
you need. And granted again, I hate using the word
all the time, but it's just so fitting. It's the
encoun strant nature of Congress, the fact you can't get
anything done. But at a certain point kind of like
the point I've made about the Federal Reserve. Look, I'm
not saying that you're responsible for the debt and the
bad decisions that were made, but you're the one that
was given the anesthesia for it, right, like, meaning you're
partly to blame. And you know, the federal government my
situation as much that they play a similar role. You know, Yeah,
they're all these problems. And that's the tough thing is
you listen to politics, everything is just a one off.
Oh they're doing that that's wrong, and you're like, no,
wrong once again. You guys are talking about stuff on
the surface level. You're not leveling with the people. We
have a system that is defunct and cannot function right.
Our our entitlement system will not work. It's mathematics, okay,
it's it's broken. It needs reform. Our immigration system. We're
not a few ice patrols away from fixing it. Right.
The people that are all against it, I think the
vast majority of them do not understand the nature of
the executive branch and what they're clot Like I've already
said I would prioritize other things other than raiding home depot.
But at the same time, you're trying, like, what you
need to do is address immigration, but Congress doesn't make
that viable. So what are you left to do? And
that's and I'm not like, you see those problems on
both sides of the aisle, You see the accouncil trends
on both sides of the aisle. But at the same time,
you know, buying up a bunch of houses, you know,
buying up a bunch of property in New York and
making them public communes. These are not answers to problems, right,
they're not this is not these aren't serious. These aren't
serious answers. And if you really want to get down
to brass tacks, if we want to tackle these situations,
there's gonna be provisions in there by definition that are
tough to swallow on both sides, because you need a
sort of a combined approach. May not be sexy to
talk about on the evening news. You know, it's not
red meat. You're not going to sell it to either
side and have them all pumped up and holding up signs.
But the other thing, you know, hopefully that's the other thing.
Speaker 4: Man.
Speaker 3: Sometimes we started running at some point we started running
a government political campaigns on memes too. Right, it's like
the stock market. You never actually talk about anything serious, No,
just nonsense.
Speaker 4: Yeah, everything's a bontre sticker when it comes to politics
in a sound by it and TikTok links.
Speaker 3: Other than that, things look great, right? Other than that,
how is the movie this? Or how is the play?
Missus Lincoln? Anyway? We got a roll? You got anything
else you want to add to that?
Speaker 4: Nope, job tomorrow, jobs tomorrow.
Speaker 3: We'll see you guys tomorrow. As always, follow us on
social Media, Know Your Risk Podcast, Instaface, Twitter, all that
to X. I guess now you got to call it.
I refuse, but go on, I know it will always be.
I'm not going to send an X. I'm gonna send
a tweet.
Speaker 4: You know, I don't really say, Matt, I don't really Yeah,
I'm an old geezer now I get it.
Speaker 3: But let's Facebook, get off my lawn, kid exactly. Anyway,
I have a wonderful, wonderful evening. We'll see you guys tomorrow.
You're listening to Know Your Risk Podcast. Download and subscribe
at Know Your Riskpodcast dot com.
Speaker 2: Investment advice cannot be given without a client service agreement.
Zach Abraham is an investment advisor representative of Trek Financial
and SEC registered investment advisor. Bollward Capital Management is a
marketing name only and does not carry a separate registration.
Speaker 1: That was Zach's podcast, Zach Abraham, Chief Investment Officer, Bullward
Capital Management. We'd be nowhere without Zach's initial belief in
this program. So again I thank him. I thank God
for bringing us together as friends and partners. And now
this has been the Zach Abraham version of The Todd
Herman Show. But I still ask you to go, be well,
be strong, be kind, and make a decision to walk
in the light of Christ.