Speaker 1: Zach Gabraham joins us and I have a whole series
Speaker 1: of questions for Zach, such as this insane world. You
Speaker 1: operate in the separate country of Washington State. They ran
Speaker 1: a poll about ice enforcing immigration laws there. We'll talk
Speaker 1: about that. Plus Zach posted the most curious thing there
Speaker 1: are now more ETFs in the United States than there
Speaker 1: are individual stocks. And Zach said, gosh, what could go wrong?
Speaker 1: We'll talk with Zach Gabraham about your chances of retiring
Speaker 1: comfortably in a nation on the precipice of either greatness
Speaker 1: or ruin. We'll do this with the help of Renew
Speaker 1: dot Healthcare. Go to join stem cell talks dot com.
Speaker 1: Coming up of the eleventh September, me and the docs
Speaker 1: from renew We're going to talk about stem cells and
Speaker 1: everybody who attends, goes through the whole thing is entered
Speaker 1: to win a free week stay at beautiful Hotel Meal
Speaker 1: in Nuevavarta. It's joined stem cells talks dot com. Now,
Speaker 1: thank you God Almighty for time to have wise counsel.
Speaker 2: Disapproved, but big pharma technocrats and tyrn s everywhere from
Speaker 2: the high mountains of Free America. Here's the Emerald city
Speaker 2: exile tied to her man.
Speaker 1: Today is the day the Lord has made, and these
Speaker 1: are the times to which God has decided we shall
Speaker 1: live in. Joining me is the Cheat investment Officer Bulwark,
Speaker 1: cap of the management. It's my friend and brother, Zach Abraham. Zach,
Speaker 1: welcome back to the program. Good salute to the people.
Speaker 3: How are you doing good? Doing good? I feel like
Speaker 3: we haven't done this in a while.
Speaker 1: No, we did it last week. But we did have
Speaker 1: that long break when you went up to Alaska and
Speaker 1: then you right.
Speaker 3: Might be where it was.
Speaker 4: And you know, I only used I only used one
Speaker 4: of my helicopters to get up there.
Speaker 1: Lock, you are really slowing down, you guys want normally
Speaker 1: you take your helicopter and each of the boys takes one.
Speaker 4: Well, yeah, and then we have a yacht come up
Speaker 4: as he's got a helicopter pad on it. Yes, I mean,
Speaker 4: you know you've got a helicopter. You can't be without
Speaker 4: your helicopter pat.
Speaker 1: Yeah. And just so everybody knows, Zach he's being a
Speaker 1: little bit sarcastic. He's actually very responsible with money. Do
Speaker 1: you know the genesis of the helicopter jokes with me?
Speaker 1: Did you ever tell you that why I joke about helicopters. No, oh, okay,
Speaker 1: So back in the dot com era, I was having
Speaker 1: dinner with the CEO of a of a web publishing
Speaker 1: firm that you would know, very famous. It still exists,
Speaker 1: been through a number of sales, but it had been
Speaker 1: a public company and it had never earned a profit.
Speaker 1: It had never come to earning a profit. You remember this.
Speaker 3: Story, Yes, I remember this right? Yes? Yeah? Yes.
Speaker 1: The guy says, so I bought a helicopter and I said, why,
Speaker 1: goes well, Steve jobs as one and he was actually
Speaker 1: actually being flown into the office and landing on top
Speaker 1: of the roof in a company that never earned a profit.
Speaker 1: And by the way, Zach, it never has. I mean
Speaker 1: it's part of a bigger company now.
Speaker 4: Well yeah, but I mean the efficiencies you pick up
Speaker 4: see no, yeah, if anybody, yes, right, that's that's where
Speaker 4: you head for the door. But but uh, that being said,
Speaker 4: there's Did you ever see that show Silicon Valley on HBO?
Speaker 2: No?
Speaker 1: Is it something I should watch?
Speaker 4: It's hilarious and especially because of your experience there, you
Speaker 4: will laugh so hard because it's a parody, right, they're
Speaker 4: making fun of it. But people don't realize how similar
Speaker 4: it was. Like, for instance, they're talking to this guy
Speaker 4: that is an amalgamation of a bunch of the CEOs
Speaker 4: down there right he represents a bunch of them, and
Speaker 4: they're like, yeah, and it's gonna be great because if
Speaker 4: we do this, we're gonna post the best earnings.
Speaker 3: You know, we've ever had any earnings?
Speaker 1: Are you out of your.
Speaker 3: Mom post earnings? The investors are going to be expecting
Speaker 3: it every quarter. Don't hear post earnings. Then you're gonna
Speaker 3: make it real. We do that, Like, the guy.
Speaker 5: Just flips out, and I was laughing so hard because
Speaker 5: I'm like that, that is so oh that is so
Speaker 5: eerily close to reality in a really funny, you know,
Speaker 5: parody type.
Speaker 1: Oh my gosh, yes, I got I got just almost.
Speaker 1: This guy wanted to whip me. He wanted to like
Speaker 1: pimp slap me. We were in the garage at our
Speaker 1: building in Seattle and I said something about I was
Speaker 1: talking to one of our first investors walking him into
Speaker 1: his car and said something along the lines of, man,
Speaker 1: I'm really getting a lot of pressure to look to sell.
Speaker 1: Well the bubble still exists, and he goes he stops,
Speaker 1: you stop there is no bubble. Never say bubble, never
Speaker 1: acknowledge bubble. There is no bubble. This is all value.
Speaker 1: This is a new economy. And Zach, you know, Zach,
Speaker 1: I'm in my mid twenties listening to this, looking at
Speaker 1: this man, realizing he's been an investor most of his life.
Speaker 1: He was in his fifties. And I didn't say to him, Alan,
Speaker 1: are you kidding me? We all know this is a bubble.
Speaker 1: I shut my hole and just played along with that
Speaker 1: to my shame. So no, it's called Silicon Valley.
Speaker 3: Yeah, and yeah, and it's it is. It is hilarious
Speaker 3: if I'm if I'm thinking of it.
Speaker 4: It's not too it's not too inappropriate. It's not like
Speaker 4: a risk a show at all. It is just it's comedy,
Speaker 4: and it is if people don't know how Silicon Valley works.
Speaker 3: It's not a perfect representation.
Speaker 4: It's a parody, but it's one of those parodies where
Speaker 4: it's also not very far right. It's pretty like and
Speaker 4: people don't realize that if they're not there, what a
Speaker 4: ridiculous place it could be, like you know what I mean,
Speaker 4: Like I know you know what I'm saying. Yes, And
Speaker 4: it's hard to explain because you're sitting there thinking to yourself.
Speaker 4: Mark Andriesen put it perfectly that he left his home
Speaker 4: in Nebraska, growing up on a farm, and he gets
Speaker 4: Silicon Valley and he's like, these are the smartest people
Speaker 4: in the world.
Speaker 3: I need to adopt their worldview.
Speaker 4: And he said it wasn't until years after being there
Speaker 4: that I realized, well, these people are brilliant as it
Speaker 4: relates to this one thing, yes, but when it comes to.
Speaker 3: The rest of it, they're idiots. Yes, and that's the reality.
Speaker 1: Yes, it's a town of my epic focus on making
Speaker 1: money from code and then code related things and it
Speaker 1: sort of stops there, or business there, some some business
Speaker 1: in general. So speaking of business, you invested in a
Speaker 1: company that we've been talking about here and I've had
Speaker 1: so many interesting conversations with people, and it's Visible. I
Speaker 1: got a note from a guy, Zach. His business has
Speaker 1: been in place for fifteen years, fifteen stinking years, and
Speaker 1: he heard me talking about Visible and so for the
Speaker 1: fun of things, he went and looked at his founding documents.
Speaker 1: He had to page back three. I had to go
Speaker 1: to his gun safe page back through to founding documents,
Speaker 1: and he went back and he looked and it was
Speaker 1: all based upon his personal credit. And he realized, so, Zach,
Speaker 1: this guy has offices in Cordelane, he's got offices in Boise,
Speaker 1: he's got offices in Wyoming. It's insurance. All of those
Speaker 1: insurance firms are owns under an LLC or this or corporation.
Speaker 1: None of it is divorced from his personal credit. All
Speaker 1: of it's based upon that. So he said, Okay, can
Speaker 1: I get in touch with Bisible. I'm like, yes, it's
Speaker 1: go bisible dot com. Will put me in touch. No,
Speaker 1: you can click the website right, you can do that
Speaker 1: on your own. So what Bisible does and you invested
Speaker 1: in this, I want you to say why. They'll look
Speaker 1: at this case and obviously he knows he doesn't have
Speaker 1: corporate credits and in seven easy steps they'll solve this
Speaker 1: for you. So you can be as sophisticated as you
Speaker 1: want or new as you want. And also if you're
Speaker 1: forming a business, do it right, like get that thing
Speaker 1: set up and then get with Bisible and then have
Speaker 1: them make sure you've got corporate credit. The website is
Speaker 1: go bisible dot com with the Z go bisible dot
Speaker 1: com and real quick why did you invest?
Speaker 4: Yeah, because I was in the exact same I was
Speaker 4: in the exact same shoes that that guy was in.
Speaker 4: And a good buddy of mine that I went to
Speaker 4: college with and that lived played football with me called me,
Speaker 4: and so there was a personal interest in it for me.
Speaker 4: So I'm a silent partner. I've got nothing to do
Speaker 4: with the day to day activities. But it was something
Speaker 4: that had been plaguing me for a long time in
Speaker 4: the back of my head that I knew I was
Speaker 4: not doing. And so he called me with this business idea,
Speaker 4: and I went, well, yeah, hey, I'll be a client,
Speaker 4: but also, uh, you know, do you need some help?
Speaker 4: And so I offered help him, you know, get it off,
Speaker 4: get off the ground, and get it rolling. And I
Speaker 4: just it's something that is so simple to fix, and
Speaker 4: so people don't and so so few people have done
Speaker 4: it and taken those steps. And it's kind of like
Speaker 4: it's kind of like in the concept of investing.
Speaker 3: And it's not free, but it's relative.
Speaker 4: It's really cheap, especially for a business owner, and and
Speaker 4: you it's it's in investing. We have these scenarios where
Speaker 4: when you can get effectively free insurance, your answer should
Speaker 4: always be yes, right, And so many of us in
Speaker 4: the business world that owned businesses are passing on the
Speaker 4: free insurance that's offered by you know, the veil, the
Speaker 4: corporate veil of an LLC and and and we're piercing
Speaker 4: that veil because because we're financing it with our own
Speaker 4: personal credit and therefore nullifying the advantages. So anyway, yeah,
Speaker 4: it's it's a no brainer in my opinion.
Speaker 1: Yeah, same with me. It's go visible dot com. I
Speaker 1: want to get to this immigration poll you posted because
Speaker 1: it's fascinating and I think people are weirded out by
Speaker 1: where you continue to live in the separate country, although
Speaker 1: albeit you live in a far better area there. But
Speaker 1: I wanted to get to this because this you have
Speaker 1: been warning us about this. Can I see it this way?
Speaker 1: Like the ryal fok do nie on four years? It's ye,
Speaker 1: I've spent nine on four years. There are now more
Speaker 1: ETFs electronic trading funds the United States than there are
Speaker 1: individual stocks, and you wrote something in regard to gosh,
Speaker 1: what could go wrong? A are you freaking kidding me?
Speaker 1: There's more ETFs than individual stocks and no one is
Speaker 1: calling an alarm bell on this.
Speaker 3: Oh well no, because it hasn't There hasn't been any
Speaker 3: negative outcome.
Speaker 1: Oh good, so let's move on.
Speaker 4: So getting past yes, well, because we I mean, look,
Speaker 4: we all know how this works, right, As long as
Speaker 4: number go up, nobody cares.
Speaker 2: Right.
Speaker 4: It's one of the reasons that we refer to regulators
Speaker 4: as firemen, meaning they never act preemptively to stop a fire.
Speaker 4: And and and I don't mean that in pure criticism.
Speaker 4: There's a lot of different reasons why that's the case.
Speaker 4: But but here here's the issue. But let me also
Speaker 4: sit there and go, this isn't all about fear and
Speaker 4: and and being freaked out about it and impending market collapse.
Speaker 3: But but what it tells you is that something is
Speaker 3: inherently unstable.
Speaker 4: Okay, So you ETFs by definition have to be made
Speaker 4: of stocks. If you're looking at a marketplace where you've
Speaker 4: got more ttfs than stocks, pretty good sign you've kind
Speaker 4: of overrun the usefulness, right, or you've just overdone it.
Speaker 4: And so what you've got now is you've got a
Speaker 4: market and you can see it like this on a
Speaker 4: daily basis. You've got a market where securities are trading
Speaker 4: and not all the time, but frequently securities are trading
Speaker 4: completely divorced from their underlying you know, idiosyncratic details, right,
Speaker 4: meaning they're just trading with the other group of stocks
Speaker 4: because there is more money going in and out of
Speaker 4: ETFs than there are stocks. So by definition, you've got
Speaker 4: this setup where the tail is wagging the dog. So
Speaker 4: a company can come out and announce really bad earnings,
Speaker 4: but if people are dumping money into the ETF, the
Speaker 4: stock could go up, right, And a perfect example of this,
Speaker 4: in my opinion, Now I can't tell you one hundred
Speaker 4: percent this is the case, but if you will, if
Speaker 4: you look at the S and P five hundred right now,
Speaker 4: and you look at the Nasdaq, for instance, there's some
Speaker 4: obvious anomalies, but one of them is kind of hiding
Speaker 4: in plain sight.
Speaker 3: Apple, Right.
Speaker 4: Go look at Apple and look at the fact that
Speaker 4: Apple is trading at thirty six times earnings, Okay, and
Speaker 4: then you look at how bad their performance has been.
Speaker 3: Their growth rate has fallen off.
Speaker 4: You're looking at five six percent growth, margins are down
Speaker 4: at fifteen percent. You look at a bunch of other
Speaker 4: the companies that are valued at that level, and they're growing.
Speaker 3: Way faster, multiples faster.
Speaker 4: Take a company like Google, which we've been talking about
Speaker 4: that's undervalued for a long time. It's getting an eight
Speaker 4: and a half nine percent pop today because, like we said,
Speaker 4: a lot of this stuff about Chrome being illegal was
Speaker 4: a lot of overhype nonsense. But one of the reasons
Speaker 4: in our opinion, and again I cannot prove this, but
Speaker 4: if you look at a stock like Apple, where you're
Speaker 4: looking at the underlying performance, Costco would be similar. Their
Speaker 4: performance isn't falling off, but you're looking at a company
Speaker 4: growing at seven and a half percent a year trading
Speaker 4: at fifty four times earnings. Just mind boggling, right, and
Speaker 4: then Costco is a great company growing at eight percent
Speaker 4: a year with two point seventy five percent margins.
Speaker 3: Right, So, and you're going you're gonna pay fifty four
Speaker 3: times ear any for that doesn't make sense. But what
Speaker 3: is happening is that as money goes into these indexes,
Speaker 3: the money that flows into the indexes is awarded to
Speaker 3: the stock based on that individual stock size, not how
Speaker 3: it's performing, not how the profit. So when you put
Speaker 3: money into the.
Speaker 4: Nasdaq or the S and P five hundred ETF six
Speaker 4: and a half to seven cents of every dollar, you're
Speaker 4: putting in is going into Apple regardless of how it's trading.
Speaker 4: Why because it's the one of the two biggest companies
Speaker 4: in the index. So what happens even though the performance
Speaker 4: of Apple falls off, the stock keeps going up. So
Speaker 4: it's it's met some resistance lately. But at the same time,
Speaker 4: it's one of the reasons that you see so many
Speaker 4: of these head scratching valuations because you're looking around going,
Speaker 4: wait a second, these two companies are in the same sector.
Speaker 4: How could this mark could be telling me that this
Speaker 4: company growing at fifteen percent is worth half the multiple
Speaker 4: or the valuation that we're putting on this company that's
Speaker 4: going at five That doesn't make any sense, right. Meanwhile,
Speaker 4: the company growing at fifteen percent's got thirty percent margins
Speaker 4: Apples at fifteen and you're sitting there going, nobody would
Speaker 4: pay for that?
Speaker 3: Well, how do we explain it?
Speaker 4: You look around, look at ETFs, and you go that
Speaker 4: that's got to be it. So here's here's the bright side.
Speaker 4: And you and I were talking about this. The value
Speaker 4: fund that I run on the year is up twenty
Speaker 4: three percent plus on the year. Okay, and we've had
Speaker 4: bad years too. I'm not sitting here saying we're always right.
Speaker 4: But one of the reasons that's driven that out performance
Speaker 4: is by us going through a lot of these indexes
Speaker 4: and picking out the companies that are just artificially too
Speaker 4: cheap and not owning the ones that are artificially too expensive.
Speaker 4: And a lot of that has to do with international markets,
Speaker 4: because international markets are even more divorced from reality than us.
Speaker 3: And then you throw in precious me which still amazingly
Speaker 3: nobody seems to be nearly that that interested in, which
Speaker 3: is crazy to me because those stocks are still dirt cheap.
Speaker 3: But but you look at all these opportunities out there,
Speaker 3: and you're looking at a scenario where, like I said,
Speaker 3: there's things we need to be aware of, and there's
Speaker 3: concerns about that whole ETF situation.
Speaker 4: At the same time, right dangerous opportunity, meaning what does
Speaker 4: that mean you got a bunch of overpriced stocks. It
Speaker 4: also means you got a bunch of artificially undervalued stocks,
Speaker 4: and that has got us licking our chops and you know, I,
Speaker 4: you know, we'll have to see the way it goes.
Speaker 4: But based on you know, a lot of the stuff
Speaker 4: that we hold, I'm sitting there looking at our years
Speaker 4: so far going.
Speaker 3: Man, this is just the beginning, because there's just a
Speaker 3: but this.
Speaker 4: This has created a bunch of overpriced nonsense, but it's
Speaker 4: also created a bunch of underpriced bargains too.
Speaker 1: Okay, I have a probably stupid man question, and I'll
Speaker 1: ask this stupid man question in a second because a
Speaker 1: metaphor came to me trying to understand one dynamic of this.
Speaker 1: Me concerned more t ETFs than individual stocks. So I'm
Speaker 1: going to provide a metaphor here in just a second.
Speaker 1: Because there's got to be a war coming on this.
Speaker 1: I'll explain what I mean. My friend Tim Krukshank knows
Speaker 1: what it's like to fight a real war. So in
Speaker 1: that Hunger Game scene where President Snow says to Catnus,
Speaker 1: tell me, my dear, you've been in the Hunger Games?
Speaker 1: Would you like to be in a real war? And
Speaker 1: she doesn't want to do that, Tim knows what's that like.
Speaker 1: So he also knows the war in business is nothing
Speaker 1: like being actually deployed, as he was three times as
Speaker 1: a medic attached to the seal teams. But it has
Speaker 1: been a bit of a war, bit of a battle.
Speaker 1: Getting bone Frog to where it's at. First, of all,
Speaker 1: Tim Krukshank Navy seal and physician's assistance in the real world.
Speaker 1: He didn't understand coffee. He just knew wanted to start
Speaker 1: a coffee company. He knew he wanted to honor fallen
Speaker 1: Navy seals. Hence ten percent of proceeds go to support
Speaker 1: the families of fallen Navy Seals, often through the Navy
Speaker 1: Seal Foundation. Knowing that, he knew he wanted to have
Speaker 1: an indelible logo in a statement, so he chose the
Speaker 1: bone Frog. He didn't want to steal the work of
Speaker 1: the artist who created the bone frog, who is a seal.
Speaker 1: That image stands for the body of a fallen seal,
Speaker 1: so he changed it slightly honors the artist. He wanted
Speaker 1: to honor God. Every beg says God, Country team on it,
Speaker 1: and I think this is why God has blessed the company.
Speaker 1: And God blessed the company with the presence of a
Speaker 1: guy named Dave Stewart who took a liking to Tim
Speaker 1: and took him under his wing. Dave started Seattle's Best
Speaker 1: Coffee and he tutors Tim and mentors him on the
Speaker 1: coffee roast. In fact, Dave makes some of the roasts.
Speaker 1: This is why I think Bone Frog is still fighting
Speaker 1: the battle. They have it won completely, yet they're on
Speaker 1: the precipice. So when you subscribe the bone Frog Coffee,
Speaker 1: you're joining God Country Team, the team. You're getting excellent coffee.
Speaker 1: You're supporting a company that hires veterans whenever they can,
Speaker 1: works with veteran owned companies. Tim just had to replace
Speaker 1: two team members because they went to join the Navy Seals,
Speaker 1: and I got to check with him to see if
Speaker 1: they made it through buds and if so, if they're
Speaker 1: under the next stage, you're becoming seals. So go join
Speaker 1: the Godcountry Team. Family. At Bonefrog Coffee dot com slash todd,
Speaker 1: use promo code Todd when you check out, you'll get
Speaker 1: fifteen percent off subscription coffe. Forget all that stuff about
Speaker 1: trying the coffee. Just trust me and trust the taste
Speaker 1: and trust the heritage. It's Bonefrog Coffee dot com, slash todd,
Speaker 1: promo code Todd when you check out and subscribe to
Speaker 1: your favorite roasts. So Zach, this occurred to me and
Speaker 1: you mentioned Apple is one of these stocks. And then
Speaker 1: you also, I know you had a chat with a
Speaker 1: lead code on Microsoft's AI team. I want to get
Speaker 1: to that. So if I were to come to you
Speaker 1: and I were a and I were to pitch, let's
Speaker 1: and I'm just making this up, but let's say I
Speaker 1: was to come to you and pitch a whole bunch
Speaker 1: of bowling alleys. Okay, So I came in and I
Speaker 1: showed you this design, and look here's what we think.
Speaker 1: You know, this is the data play, Zach. It's not
Speaker 1: just the bowlding. These are people who like you know,
Speaker 1: they like these family sports. And you know, we're gonna
Speaker 1: have meals there, but then we're gonna be able to
Speaker 1: try meals and sample meals and maybe send some of
Speaker 1: these meals home. And you know, we're got of an app,
Speaker 1: but that apple also help us track people where they
Speaker 1: go and what else did they buy. So we're pretty
Speaker 1: sophisticated on this. And so we want to build four
Speaker 1: million bowling alleys. Look at me and say how many
Speaker 1: active bowlers are there in America? A million? Your likelihood
Speaker 1: of investing in me building four million bowling alleys for
Speaker 1: for for one million bowlers would be what.
Speaker 3: Well, I mean, are they AI? O?
Speaker 1: My point?
Speaker 3: Are these going to be in Nvidia brand. Yes.
Speaker 1: As a matter of fact, today I look over to
Speaker 1: my CTO, aren't they Yeah, then I mean yeah, oh yeah,
Speaker 1: it's Zack. It's all Ai right, it's all So. My
Speaker 1: point is this, Zach, if there are more ETFs than
Speaker 1: individual stocks, some of these ETFs.
Speaker 3: Have to die. Yeah, no, no, yeah they yeah, they do.
Speaker 1: What happens to your money? If this is your ETF
Speaker 1: and the ETF dies, that's got to be in the
Speaker 1: terms of service somewhere what happens.
Speaker 4: Well, so then it then would be based off liquidation
Speaker 4: value of the underlying securities. So the so if so theoretically,
Speaker 4: if that were to occur because of lack of volume,
Speaker 4: which which has happened. There have been multiple ETFs that
Speaker 4: have gone out just because there wasn't enough volume enough
Speaker 4: people were training them. But what it does do is
Speaker 4: it creates an automatic liquidation and and you the investors
Speaker 4: would be given back. So for instance, you know, let's
Speaker 4: say the ETF goes no bid, but it sells off
Speaker 4: the underlying stock, the investor would get the value of
Speaker 4: the shares of stock.
Speaker 3: In that day. So that wouldn't be that really wouldn't
Speaker 3: be a huge horrible event.
Speaker 4: Okay, okay, where where it could become where where where
Speaker 4: where things get kind of interesting is if you think
Speaker 4: about it, it's really it's impossible determine tops and bottoms
Speaker 4: and things like this.
Speaker 3: Okay, but but go with me for a second on
Speaker 3: this path.
Speaker 4: If we are are investing via an ETF that only tracks,
Speaker 4: that allocates money based on the size of a company,
Speaker 4: So we're buying more shares of Apple, not because it's
Speaker 4: doing better because it's bigger.
Speaker 3: Right, That is not the way markets are supposed to work.
Speaker 4: We're supposed to discover this discover value, right, that's a
Speaker 4: discovery of value discovery mechanism. So the real issue here
Speaker 4: is not so much the ETFs blowing up. But let
Speaker 4: me give you a prime example. Look at the baby boomers.
Speaker 4: If you look at the average baby boomer portfolio, they
Speaker 4: use almost exclusively ETFs with some individual stockholdings. Okay, baby
Speaker 4: boomer class it owns by far and away the most securities.
Speaker 4: At some point, baby boomers will you will have and
Speaker 4: you're probably already there at.
Speaker 3: The tipping point.
Speaker 4: But at some point, when you look at how much
Speaker 4: of stock's baby boomers own, they will become forced liquidators
Speaker 4: of stocks. The number one thing they all own is
Speaker 4: SMP five hundred ETF. Okay, So this endless buying that
Speaker 4: has been financed by all of their four oh one
Speaker 4: ks and their personal accounts. Right when they quit working,
Speaker 4: they've got to start pay taking money out.
Speaker 3: So what was this.
Speaker 4: Beautiful reflexive cycle of no matter what happens, Because remember
Speaker 4: you're putting money into your four oh one K every
Speaker 4: two weeks, no matter what happens, right, it's just getting
Speaker 4: sucked out of your account, and then it gets automatically
Speaker 4: allocated to the S and P five hundred. So that's
Speaker 4: why you'll see markets take a short term dip and
Speaker 4: then you'll see them just start ratcheting back up regardless
Speaker 4: of news. Why money flows well, at a certain point,
Speaker 4: the baby boomers are going to tip over where the
Speaker 4: amount you're pulling out every month so they can pay
Speaker 4: their bills will exceed the amount that people are putting
Speaker 4: into the ETF. And when that happens, you'll yet a
Speaker 4: reflexive cycle that was much. You know, it'll be the
Speaker 4: inverse of the way it was on the way up,
Speaker 4: where you're sitting there looking at companies going wait a second,
Speaker 4: why is it dropping it had a good quarter. People
Speaker 4: are selling it, right, and more of the and more
Speaker 4: of the stock is held via the ETF than individual right,
Speaker 4: So if the ETF starts selling, there's not enough buyers
Speaker 4: on the other side to hold the price of that
Speaker 4: stock out.
Speaker 1: So this is when the perpetual motion machine stuffs moving.
Speaker 3: Yeah, I mean, and look it's it's again.
Speaker 4: Exactly what triggers it or how it happens, I'm not
Speaker 4: going to pretend to know. But anytime you see what
Speaker 4: we call a reflexive cycle, a cycle that feeds on itself,
Speaker 4: which is think about the Triple ques the NASDAC. Okay,
Speaker 4: everybody wants in it. Why, well they're gonna take because
Speaker 4: they own the best companies in world. Yeah that and
Speaker 4: it's been the best performing index over the last fifteen years.
Speaker 4: Let's not pretend like that doesn't have something to do.
Speaker 3: With it, right, But we just keep pumping money into that.
Speaker 4: Well now you so, now you've got a situation where
Speaker 4: the vast majority of money that owns the Nasdaq is
Speaker 4: via the Triple QETF.
Speaker 3: Right, So when those people have.
Speaker 4: To start liquidating to pay their bills every single month,
Speaker 4: and that amount of money is greater than the amount
Speaker 4: of money that's going into it, you will just get
Speaker 4: the inverse.
Speaker 3: And that's the way every reflexive cycle works.
Speaker 4: It's not different from anything, right, the same thing you
Speaker 4: enjoy on the way up will eventually become its opposite,
Speaker 4: and you'll have to endure on the way down. Anybody
Speaker 4: that's an adult knows that that's true in all aspects
Speaker 4: of life, and it's through in investing as well. But
Speaker 4: like I said, where my biggest thing. Here's what I
Speaker 4: think will happen eventually, and I think that this year
Speaker 4: is a microcosm. We have been so blinded by the
Speaker 4: largest and longest bull market in the history of the
Speaker 4: United States that people think it's the only market left
Speaker 4: in the world. And they go, that's not true. And
Speaker 4: I go show me your portfolio. You're ninety eight percent
Speaker 4: US equities. You can say you don't think it's the
Speaker 4: only market in the world. Your money says something differently, right,
Speaker 4: And so what we're trying to tell people's look, nobody
Speaker 4: can tell you whether this is going to create some
Speaker 4: big market collapse or anything like that. But what I
Speaker 4: do think will happen in some way, shape or form
Speaker 4: to some magnitude and we'll see it. And like I said,
Speaker 4: I see it happening so far this year. All of
Speaker 4: a sudden, you look at it this year and out
Speaker 4: of the forty top performing markets in the world, the
Speaker 4: US ranks like thirty fourth or thirty fifth, Right, So
Speaker 4: why I just think the valuation spread's gotten way too big,
Speaker 4: And I think there's a lot of low hanging fruit
Speaker 4: out there and everybody is so bold up on US
Speaker 4: equities that in my opinion, they're not seeing the forest
Speaker 4: for the trees. Now at the beginning of the year,
Speaker 4: I would say that that was more of a prognostication
Speaker 4: on my part. Look at US this year, you know,
Speaker 4: outperforming the market by almost fourteen fifteen percent, so it's
Speaker 4: clearly working. And the thing we're excited about is the
Speaker 4: valuation gap I see is just as stunning as it
Speaker 4: was in the beginning of the year. So you know,
Speaker 4: I think this opportunity is in the first inning. And
Speaker 4: you know, worst case scenario, like people are like, how
Speaker 4: bad could it be? I don't think it'll be this bad.
Speaker 4: But a good example of this would be Japan, right,
Speaker 4: Japan had a similar market dynamic. Everybody in the world
Speaker 4: was dumping money into Japan in the eighties. Their market
Speaker 4: topped out the nik at forty and nineteen eighty nine.
Speaker 4: It didn't get back there until a year ago. Yeah,
Speaker 4: thirty five years later. Right now, Again, the US is different.
Speaker 4: I don't think the US is going to underform you know,
Speaker 4: much of the rest of the world for the next
Speaker 4: thirty five years, but for the next five to ten
Speaker 4: it probably should, and it most likely will, given you know,
Speaker 4: looking at history, so you know, looking at a lot
Speaker 4: of people. When you consider inflation, the prospects of inflation
Speaker 4: going forward, and you think about US markets underperforming, that
Speaker 4: could create quite a problem. Let's say the US market
Speaker 4: averages four percent a year for the next ten years,
Speaker 4: which would be actually really good performance considering the run
Speaker 4: it's tattle of the last fifteen Well, if inflation's running
Speaker 4: at six average over the next ten years, you're making
Speaker 4: four you just got smoked.
Speaker 3: You got smoked. Right. Oh.
Speaker 4: Meanwhile, you look at all these opportunities you've gotten other markets,
Speaker 4: precious metals, commodity stocks, and nobody wants there's plenty of
Speaker 4: ways to avoid that, and I think there's plenty of
Speaker 4: amazing opportunities out there.
Speaker 3: They're just not in the places everybody's looking.
Speaker 1: Great way to put that. And if you like what
Speaker 1: you've heard from Zach Distrom of Analysis, know that he
Speaker 1: has a podcast. Go to Know Your Riskpodcast dot com.
Speaker 1: Sign up for that. These all over social media as well,
Speaker 1: but you can get this with them on a pretty
Speaker 1: regular basis Know Your Riskpodcast dot Com. Speaking to that,
Speaker 1: Zach talked it's one of the top coders at Microsoft.
Speaker 1: And about the Apple AI. We need to talk about that.
Speaker 1: We need to talk about housing. I saw an analysis
Speaker 1: that the average age of the first time home buyer
Speaker 1: in the United States of America is thirty five, and
Speaker 1: the average age of any buyer is fifty six in
Speaker 1: these sets of America and what that means. And Jadvance
Speaker 1: talked about housing prices. Hey, quick reminder, we're trying to
Speaker 1: do something really, really important for the people who run
Speaker 1: Alan soaps. And this is what we mean. There's no
Speaker 1: secrets that Alan's not They all due respect to the family.
Speaker 1: I love John, He's a very good friend. They could
Speaker 1: not afford to purchase slots on this podcast. They don't
Speaker 1: do the amount of money that renew does or Visible
Speaker 1: or Bulwark or Angel Studios or optimizers. We give them
Speaker 1: the slots and they pay us. But because I love
Speaker 1: the mission of Alan's, which is to employ people like
Speaker 1: Alan who is nonverbal, because it's expressed by his placement
Speaker 1: on the autism spectrum. He's got these physical challenges. His
Speaker 1: brother Ian is impacted by autism. That's the genesis of
Speaker 1: the soap company, and it exists to employ people like that,
Speaker 1: and that's what we do. The soap is made in America.
Speaker 1: It's all natural. I challenge you to find a better family.
Speaker 1: Three generations of soap making expertise the family they partner with.
Speaker 1: Here's the special thing we're trying to do. John was
Speaker 1: kind enough to share with us that he has decided
Speaker 1: to stop fighting cancer. He knows he's going to Jesus.
Speaker 1: He's trying to focus on these last however month many
Speaker 1: months the Lord gives him with his family. I want
Speaker 1: you to just examine your heart. You've heard us talk
Speaker 1: about Alan's. If you haven't tried this soap yet, all
Speaker 1: I ask is you try it and if you love
Speaker 1: it or like it, it's as good as what you buy.
Speaker 1: Now convert become a subscriber to the soap. This a
Speaker 1: way when John's wife starts running the company. She comes
Speaker 1: in with predictable revenues. But I please, I beg you.
Speaker 1: If the soap is not what you want, do not
Speaker 1: buy it. This is not a charity. Okay, go to
Speaker 1: Alan soaps dot com slash todd. That's Alan Soaps dot
Speaker 1: com slash todd. So you zach I had a conversation
Speaker 1: with one of the lead coders at Microsoft's AI team,
Speaker 1: and among the things you talked about, you asked him
Speaker 1: about the story Apple quietly builds chat GPT rival with
Speaker 1: new answers search term and he laughed in response to this,
Speaker 1: So talk about that laughter, but also this conversation about
Speaker 1: Microsoft and AI and where that's all headed.
Speaker 3: Yeah, pretty fascinating.
Speaker 4: As a matter of fact, we're gonna have an interview
Speaker 4: with him that we're recording this Friday, so we're gonna
Speaker 4: have it up on our podcast, and we're gonna really
Speaker 4: dig into the a I.
Speaker 3: Think because he's yeah, he's he's at the nexus of it.
Speaker 4: So first, as it relates to Apple, it's kind of
Speaker 4: funny because Apple is really diverged from its perception, meaning
Speaker 4: you know, we all see Apple as this titan and
Speaker 4: kind of think it's a, it's at the center of
Speaker 4: all this stuff.
Speaker 3: It really isn't.
Speaker 4: They've fallen out and and and there was the announcement
Speaker 4: about them creating their own rival to chat GPT. Within
Speaker 4: about a week or two they came out and said
Speaker 4: that they were now considering using Gemini via chrome cast
Speaker 4: in concert with Google. And and I just think that
Speaker 4: that's from what he was saying. He just said, look,
Speaker 4: in the industry, nobody takes them serious whatsoever, and nobody
Speaker 4: even considers them to be in the race. So and
Speaker 4: he goes, quite honestly, unless they were to buy somebody,
Speaker 4: they're too they're too far out, they're too far gone,
Speaker 4: and they don't have the cash pile advantage that they
Speaker 4: used to. I mean, Apple was the first of those
Speaker 4: tech companies to really build that that crazy amount of cash,
Speaker 4: you know, in the hundreds of billions on the balance sheet.
Speaker 4: And when you look around today, even if they want
Speaker 4: to buy somebody, it's not a clear solution about whether
Speaker 4: they'd be able to. Meaning you've got antitrust issues that
Speaker 4: they'd be running into, and then there'd be competition. Like
Speaker 4: I said, they do, they do. They are not the
Speaker 4: giant behemoth on the block. Anymore that nobody else can
Speaker 4: contend with, you know, like, for instance, you know I
Speaker 4: was telling you not too long ago. You know, most
Speaker 4: people are not aware of the fact that Google produces
Speaker 4: substantially more revenue and profit every year than Apple does, right,
Speaker 4: And most people are not aware of that, yep, And
Speaker 4: so anyway, I just just it's more clue to My
Speaker 4: biggest thing about bringing that up is that I look
Speaker 4: at these retail portfolios all the time, and a lot
Speaker 4: of people have owned Apple, and a lot of people
Speaker 4: done wonderfully with Apple. Then you look at it and go, okay,
Speaker 4: because they've done wonderfully, They've got this huge chunk of
Speaker 4: Apple stock.
Speaker 3: It's just a too big a portion of their portfolio.
Speaker 4: And our biggest message to them is, look, nobody including me,
Speaker 4: can tell you exactly what the price of the stock
Speaker 4: is going to do in any given period of time.
Speaker 4: But what I will say is that all the reasons
Speaker 4: that you owned Apple for they're gone. Okay, it's not
Speaker 4: the same company, it's not doing the same thing. They
Speaker 4: are seeding market share to Samsung, they are seating market
Speaker 4: share to Huawei, They're seeding market shared to the Google Pixel.
Speaker 3: Okay, and they when you look at.
Speaker 4: Their company, they're a one product company, so seating market
Speaker 4: share is kind of a problem. I don't think they're
Speaker 4: going away anytime soon. I'm just looking at a company
Speaker 4: that just does not justify or earn the current price
Speaker 4: it's trading at now. On the flip ai side, talking
Speaker 4: about AI in general, the the you know, everybody is
Speaker 4: up on the AI conversation. I don't think anybody realizes
Speaker 4: how fast this trend's coming down the pipe. So, like
Speaker 4: we were talking about where we use, you and I
Speaker 4: have discussed this before, but you talk about Moore's law, right,
Speaker 4: the doubling of compute power every eighteen months.
Speaker 3: These LM models are doubling their compute every three to
Speaker 3: four months, and people are like, well, what does that mean.
Speaker 4: I'm like, this is one of the tough things to
Speaker 4: convey because human beings are uniquely bad and understanding exponential growth.
Speaker 4: What that means is you're looking at the capability of
Speaker 4: LMS doing what they're doing today, and you're looking at
Speaker 4: just three years in the future of that being. You know,
Speaker 4: eight to ten x what it is right now, eight
Speaker 4: to ten x what it is right now.
Speaker 1: And maybe just two to three years maybe one way
Speaker 1: to compute this for people is to understand that with
Speaker 1: each exponential growth right cycle, there are new industries that
Speaker 1: can eat, there are new jobs it consumes, right, And
Speaker 1: you think, well, AI is never going to compete with
Speaker 1: you know, you're never going to have an AI air
Speaker 1: conditioning tech. It's not never, it's when, it's when. And
Speaker 1: you could say, well, that's that requires robots and stuff
Speaker 1: that can come into people's house. That can't happen for
Speaker 1: a long time. Yeah, when you look at exponential growth, No, no,
Speaker 1: that's not true.
Speaker 3: Yeah, grow growth.
Speaker 4: The growth curves that we've all looked at economically need
Speaker 4: to be thrown out the window.
Speaker 3: Right, it's no longer bound by that.
Speaker 4: And here's why you're going to have these lms that
Speaker 4: are getting massive compute gains and function functionality gains on
Speaker 4: a daily basis, and they're going to be working on
Speaker 4: these problems twenty four hours a day without blinking. Okay,
Speaker 4: So to give you an idea of what this means,
Speaker 4: he was telling me that a year ago they were
Speaker 4: looking at lms one year ago and saying, and for
Speaker 4: those of you that don't know large large language models,
Speaker 4: all these things are LMS all these AI programs. A
Speaker 4: year ago, it was on par with a junior code,
Speaker 4: a new coder.
Speaker 3: Low on the Totem Paul pull.
Speaker 4: Fast forward one year, it's the best coder they've gotten
Speaker 4: in the company.
Speaker 1: And that's in one year, right, And now a year
Speaker 1: from now, it's not even a race.
Speaker 3: No, So, and I thought this was another interesting thing.
Speaker 4: You know what he told me. He told me that
Speaker 4: his daughter was taking coding classes.
Speaker 3: He took her out of the class. Yeah, he said,
Speaker 3: it's pointless.
Speaker 1: So, and I'm I can't stand AI for many reasons.
Speaker 1: And yet I got to tell you I'm looking into
Speaker 1: taking AI classes because I'm thinking about, Hey, if this
Speaker 1: stuff's all widely available and it's just prompts and cues,
Speaker 1: like God's given me a relatively decent creativity, Yes, why
Speaker 1: don't I just sit down and think about some problems
Speaker 1: that AI could solve and create something like this? I
Speaker 1: also talk and we could do this. We could take
Speaker 1: enough of these shows and feed them into an AI
Speaker 1: and that AI could analyze them. And I'm relatively certain
Speaker 1: that we could have let's say, half of our shows
Speaker 1: per week done by AI. And Alex is nodding his
Speaker 1: head we're actually, Zach, we're actually thinking about doing this,
Speaker 1: just to see what an AI would do with enough
Speaker 1: Todd Herman show is fed into it. Do it Todd
Speaker 1: Herman Show, based upon here's the news items produce one.
Speaker 4: Yeah, I look, look, if it wasn't a if it
Speaker 4: wasn't I think it could produce I think it could
Speaker 4: produce probably surprisingly good results.
Speaker 1: That scares me.
Speaker 4: It scares me too. But here here's the flip side
Speaker 4: of that argument. You are you are multiple steps away.
Speaker 4: And and there are some people that question whether it's
Speaker 4: even attainable, which is remember these lms, no matter how
Speaker 4: crazy it is what they do, there's a huge gap
Speaker 4: between what they're doing now and creativity right totally, and
Speaker 4: and that and and and the exponential growth on the
Speaker 4: compute side may not lead to the emergence of creativity.
Speaker 1: I don't think it can because I think creativity is
Speaker 1: a bridge to God, so I would agree. I've often
Speaker 1: said our conscience is a bridge to God's. I think
Speaker 1: creativity is that because God creates, Satan can't create, so
Speaker 1: he can distort it, he can depress, he can distract.
Speaker 1: Computers can amalgamate code come and malgamate large language models
Speaker 1: are looking at everything ever written by humans and then
Speaker 1: eventually by machines. All roll into that. But it couldn't say,
Speaker 1: invent a new flavor of ice cream. I mean it
Speaker 1: could take all sorts of flavors of ice cream and
Speaker 1: say this. My daughter's an artist, and she's recently started
Speaker 1: selling a lot of her work, and I'm begging her,
Speaker 1: in your art studio, make sure it's always on camera, right,
Speaker 1: I mean, yeah, have a place where you can leave
Speaker 1: and not be on camera, but let people see you
Speaker 1: creating your work. Create a form of art you can
Speaker 1: create in front of people, you know. And I'm thinking
Speaker 1: for me, I think God's telling me to go out
Speaker 1: and do more live events. You know, we can go
Speaker 1: put you know, you've seen it. I mean, we can
Speaker 1: put a lot of people in a row, praise God
Speaker 1: because the lords of the audience. And I was just
Speaker 1: in two below and you know with American Family Radio
Speaker 1: we had two or three thousand people show up for
Speaker 1: that event. So wow, Yeah, I want to go do
Speaker 1: more of that because a I can't shake a hand, right,
Speaker 1: it can't do these things et.
Speaker 3: Cetera, like a like a Todd Herman road show. Yeah, right,
Speaker 3: And and and I would be a happy sponsor.
Speaker 1: Well i'd be. I want you to come, well.
Speaker 4: I mean yeah, I mean I would love to come too,
Speaker 4: especially somewhere like too.
Speaker 1: I've always wanted to go to Tupelou Dude, you're on. Okay,
Speaker 1: We're going to arrange just to go to Tupelo, Mississippi.
Speaker 1: We'll take you down there for that. It is and no,
Speaker 1: that's and like Elvis is all over that place. You
Speaker 1: can talk to people to this day who knew the
Speaker 1: Presley family and you could actually run into them like
Speaker 1: you can run into people who knew the pro Oh yeah, yeah,
Speaker 1: knew the Presley's. And it's it's you know, it's it's
Speaker 1: a pretty interesting place. I got to get to a
Speaker 1: couple of different things. Is I feel like time is
Speaker 1: fleeting all the sudd and it's just gone so quickly.
Speaker 1: We have we sold this from you free live webinar,
Speaker 1: and I know that the lice I got to note
Speaker 1: from your IP people, your patentrol people, thanks a lot.
Speaker 3: So yeah, we're gonna give you the pins.
Speaker 1: Yeah, we'd be shelling out some. So we're doing a
Speaker 1: free live webinar with the people from renew dot Healthcare
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Speaker 1: So Zach, I got to get to the thing about
Speaker 1: the immigration stuff in your city there, but on on housing.
Speaker 1: A mutual friend of ours, in fact, you've we've had
Speaker 1: dinner with Tom. He likes to look at charts. His
Speaker 1: name is Tom Shaeffer. Dear friend of mine. Tom posted
Speaker 1: this on Facebook. If you want to see a national tragedy,
Speaker 1: look at this. The average age of first time homebuyers
Speaker 1: the United States is now thirty eight, and for all
Speaker 1: buyers it's fifty six. Part of this is demographics. The
Speaker 1: boomer generation swamped with everything. They're primary holder of all
Speaker 1: asset classes from houses. You just said this zac to
Speaker 1: the stock market, but they also sat back and questionally
Speaker 1: supported the stupid, ridiculous Fed monetary policies centralized banking lots
Speaker 1: which have artists wild drive, been up the cost of
Speaker 1: hard assets and consumer goods, and it made regional banks
Speaker 1: somewhat of an anachronism. That children of boomers, my children
Speaker 1: and their peers are faced with just getting by paying
Speaker 1: rent and meeting their basic needs, even with good paying jobs,
Speaker 1: not being able to save or invest. That is not
Speaker 1: a beautiful future. Jadvan said, A had a conversation about this.
Speaker 1: But first of all, what you responded this because Jadvan
Speaker 1: said something about housing markets. So in that scenario, Tom paints,
Speaker 1: it's not a pretty scenario. Is there a way to
Speaker 1: turn that around?
Speaker 3: I mean, yes, there is.
Speaker 4: It's it's gonna be tricky, and I and I'm I hesitate,
Speaker 4: and I'm not looking forward to what I think the
Speaker 4: solutions will be, because I would assume the solutions are
Speaker 4: going to be more formed or more embodiments, more forms
Speaker 4: of handouts, more forms of subsidies, which one only make
Speaker 4: the problem worse over the long run. It and it
Speaker 4: actually points to something that I would really like to see.
Speaker 4: It feels to me like the administration is kind of
Speaker 4: lost focus on this a little bit recently, which is
Speaker 4: the peeling back of regulations. They've done it to some degree,
Speaker 4: but it feels like we've really hit a roll in
Speaker 4: that process recently. I think that you need to start
Speaker 4: doing things like they're doing despite certain parts of the
Speaker 4: legal system fighting them, which is you got to start
Speaker 4: holding individual states in cities responsible for their own policies.
Speaker 3: In one way, shape or form.
Speaker 4: I mean, because you know, you look at what they're
Speaker 4: enacting up here in Seattle, and it really.
Speaker 3: People.
Speaker 4: You know, I think people have a hard time understanding
Speaker 4: it because it really is not a political issue. It's
Speaker 4: been made a political issue, but it's not. And what
Speaker 4: I mean by that is, take away who you want
Speaker 4: to vote for, who you think, remove all political ideology,
Speaker 4: and when you look at the proposals to address quote
Speaker 4: unquote expensive housing, anybody that has even a baseline understanding
Speaker 4: of economics just begins laughing because you're like, that's going
Speaker 4: to do the exact opposite of what you're talking about.
Speaker 4: And it's just like it's this broken thing in the
Speaker 4: minds of so many people in this country, particularly on
Speaker 4: the left, where it's like they have this faith in
Speaker 4: these socialist policies that have never worked at the expense
Speaker 4: of capitalist policies that always have Now like, can those
Speaker 4: capitalist policies get overplayed and people who take advantage of Yes,
Speaker 4: But the answer is not to go grab something broken
Speaker 4: off of the trash.
Speaker 3: Heap of history, right, And that's what we keep doing.
Speaker 4: And you know, people just need to wake up and say, look,
Speaker 4: these things have been tried.
Speaker 3: They don't work. Like you look what mom, Donnie's doing
Speaker 3: in New York.
Speaker 4: Every single thing he's proposed is going to increase the
Speaker 4: cost of real estate.
Speaker 3: I mean it's not there's no secret.
Speaker 1: There was just this study that finally wrapped up. They
Speaker 1: tried these universal basic income tests, right, and did you
Speaker 1: read the study yet?
Speaker 3: Ah?
Speaker 1: Okay, so it's studies save dot org, great websites. The
Speaker 1: people who around the study are shocked and they're wondering
Speaker 1: if they did the study the right way. People who
Speaker 1: got universal basic income reported more depression, more sadness, and
Speaker 1: a loss of a sense of meaning. Cocker right, cocker right,
Speaker 1: Just the checks showed up in the mail that you
Speaker 1: did nothing to earn.
Speaker 3: Yeah, no, it's it's it's it's a shocker.
Speaker 1: Here.
Speaker 4: Here's the other thing that we have to deal with,
Speaker 4: and this is a this is a really unpopular thing
Speaker 4: to bring.
Speaker 3: Up, but it is what it is.
Speaker 4: The issue that we have with young peop people being
Speaker 4: able to afford housing or even be able to afford
Speaker 4: their lives. It is not purely economical. Okay, you've got
Speaker 4: to You've got a batch and I'm speaking about mostly
Speaker 4: around the kids coming out of college. Right now, you
Speaker 4: have you have a group of college kids coming out
Speaker 4: and and a fairly large group, right it extends.
Speaker 3: It's not just one year, but you know, they're a
Speaker 3: fairly large swath.
Speaker 4: But I will just tell you as an employer, you've
Speaker 4: got kids coming out of college that are less capable
Speaker 4: of doing the job or managing in the adult world
Speaker 4: than any group of kids we've ever had come out.
Speaker 3: Do I think that there are a lost cause? Absolutely not.
Speaker 4: They'll figure out eventually and they'll become productive like every
Speaker 4: other generation in history has. But one part about it
Speaker 4: you don't hear anybody discussing. Is part of this, part
Speaker 4: of this housing problem, and part of this you know,
Speaker 4: expensive life and inflation problem. Part of it goes back
Speaker 4: to our educational system being completely broken.
Speaker 1: Broke an educational system teaching people to work right at
Speaker 1: jobs anymore in ways that are not helpful anymore, and
Speaker 1: further and further and further not even that teaching them
Speaker 1: to be good liquors of the party boot, Yeah that way, well,
Speaker 1: and look at look.
Speaker 4: Like I mean, for instance, let's take a look at
Speaker 4: AI right now, and look at the fact that none
Speaker 4: of their attitudes toward college have have been updated. If
Speaker 4: you listen to these people talk like they think that
Speaker 4: all they have to do is get people in college
Speaker 4: and everything's fine.
Speaker 1: Why so I can compete with a supercomputer that can
Speaker 1: do the work that would take me a year, that
Speaker 1: it can do it in five seconds, or.
Speaker 3: Basket weaving or whatever, right right, like, whatever it is.
Speaker 4: And you hear these people go and every kid will
Speaker 4: have a college education and that's the way the world
Speaker 4: should be. And you go, look, that is the stupidest
Speaker 4: statement on the face of the earth. First of all,
Speaker 4: if everybody has it, it's not elite a b What
Speaker 4: is the cost of that? Right yeah, If it didn't
Speaker 4: cost him anything, great, glad you had a good four
Speaker 4: years eating bad cafeteria food and drink it too much beer?
Speaker 3: Right well, what is the upside of that? Does it
Speaker 3: help you earn anymore? Does help you do anymore.
Speaker 4: No, and like it's do Some people still need to
Speaker 4: go to college, of course, but the vast majority, especially
Speaker 4: with the emergence of LLMS, I'd sit there and go
Speaker 4: learn how to think, learn how to work, get like,
Speaker 4: you know, pick up some Socrates and some Aristotle, read
Speaker 4: some Machiavelli.
Speaker 3: Let's teach you how to think. Let's teach you how
Speaker 3: to you know, give you a better understanding of history
Speaker 3: in civics. Let's teach you some trades. Let's teach you
Speaker 3: how to be an entrepreneur.
Speaker 4: Now we're just gonna keep pumping you through the same decrepit,
Speaker 4: broken system that's creating these kids that come out more
Speaker 4: confused than they went in, with no real prospects, and
Speaker 4: meanwhile they're a quarter of a million dollars in debt.
Speaker 1: It's yeh to travel or maybe go back to the
Speaker 1: Bible and make your life about building the Kingdom of Heaven.
Speaker 1: I well, maybe that's going to be part of this.
Speaker 1: I promise I would get to this, So I'm going
Speaker 1: to pay this off. The EVP said about housing. This
Speaker 1: is jd Vance and it's related to Zach something you
Speaker 1: said about your air of the world and housing, getting
Speaker 1: more expensive to fix the rig system.
Speaker 6: You asked that question, You've got to understand the root
Speaker 6: causes here. Why did housing get so unaffordable for American citizens?
Speaker 1: Two big problems.
Speaker 3: Number One, I.
Speaker 6: Already talked about interest rates were too high. Number Two,
Speaker 6: you had way too many people in this country who
Speaker 6: are competing against American citizens for scarce homes, and that's
Speaker 6: the illegal immigration problem. Why is housing leveled off over
Speaker 6: the past six months.
Speaker 1: I really believe the main.
Speaker 6: Driver is you've had negative net migration into the United
Speaker 6: States for the first time in sixty years in this country.
Speaker 6: You cannot flood the United States of America with twenty
Speaker 6: thirty forty million people who have no legal right to
Speaker 6: be here, have them compete against young American families for
Speaker 6: homes and not.
Speaker 1: Expect the price to skyrocket. It's a simple as supplying demand.
Speaker 1: You increase the demand, you're going to increase the price.
Speaker 6: And the final thing I want to say here is
Speaker 6: we're working on issues right now in the White House
Speaker 6: every single day because we want to make it easier
Speaker 6: to build homes too. Because in the same way that
Speaker 6: getting illegal aliens out of this country means fewer people competing.
Speaker 1: Against young American families.
Speaker 6: We also want to increase the housing stock in this
Speaker 6: country by making it easier to build.
Speaker 1: So we're working on all this stuff. But man, we
Speaker 1: got to be honest.
Speaker 6: The system was rigged against Americans, especially young Americans, for
Speaker 6: a very long time. We're making progress to unbring it,
Speaker 6: but it's going to take some time.
Speaker 1: That's not given enough attention what Jadvance says there about
Speaker 1: net migration, first time in sixty years we've seen a
Speaker 1: negative in your part of the country. Not only are
Speaker 1: there housing guarantees. Housing is a right. Everybody gets to
Speaker 1: have a house, even if your house is a tent
Speaker 1: and an RV until we can move you into building.
Speaker 1: Not only that, they use COVID to basically steal hotels
Speaker 1: move people into that. The appetite for that still exists.
Speaker 1: They're doing this with illegal immigrants. And then there's this.
Speaker 1: You ran this poll, and this is what I wanted
Speaker 1: to ask you about. My contention is that drives up
Speaker 1: housing costs. You put this on your own Twitter, my friends,
Speaker 1: your friend Ari Hoffman, successful talk show hosts in Seattle
Speaker 1: at five seventy KVII, the affiliate for my weekends national
Speaker 1: show on radio America. He posted this from Como News,
Speaker 1: and by the way, Como News is pretty leftist, not
Speaker 1: as bad as most of them, it's it's actually probably
Speaker 1: the most decent there. How do you feel about ICE
Speaker 1: increasing operations in the Seattle area? Seventy three percent approve,
Speaker 1: twenty five percent disapprove, two percent say each case is different.
Speaker 1: And this was three thousand and seven hundred and five votes,
Speaker 1: even if some people voted twice, that's a decent sample size.
Speaker 1: So in your part of the country, your separate country,
Speaker 1: people are approving of these raids by ICE and this
Speaker 1: housing dynamic sits they're fiating right there in the background,
Speaker 1: And I wanted to ask you this, are those things
Speaker 1: connected in your mind? Jd vance about moving people out
Speaker 1: of the country and housing. Do you think those are connected?
Speaker 1: Then a follow up question about immigration there.
Speaker 3: Yeah, I think that the housing.
Speaker 4: I think that the housing issue is abnormally complex because
Speaker 4: of what we've gone through over the last five years.
Speaker 4: So what I mean by that is, at no time
Speaker 4: in the history of our country have for a variety
Speaker 4: of different reasons, a greater percentage of the population been
Speaker 4: strongly motivated to move right. So meaning you basically took
Speaker 4: like probably four to five years of typical housing activity
Speaker 4: and crammed it into a year and a half. So
Speaker 4: naturally you're going to have a lull on the other side. Then,
Speaker 4: when you look at interest rate dynamics, interst rate dynamics
Speaker 4: are playing a big role in this as well, because
Speaker 4: one of the reasons you've got unaffordable housing is because
Speaker 4: you have so many people based off of the interest
Speaker 4: rate differential meaning the price that they're currently financed versus
Speaker 4: what they'd have to pay to get something else. That
Speaker 4: is keeping an abnormal amount of people locked into their
Speaker 4: current house.
Speaker 3: Yep.
Speaker 4: Now is the immigration situation helping any of that, No,
Speaker 4: it's contributing it as well. But like many things, this
Speaker 4: is a multi pronged deal. You've got normal inflationary pressures,
Speaker 4: which is putting pressure on housing, so just everything is
Speaker 4: sort of pushing. Here's another one that nobody's going to
Speaker 4: talk about, but it is true, meaning you you underbuilt
Speaker 4: housing for a decade. Now, you didn't really underbuild it
Speaker 4: because what you were basically doing is absorbing the overbuilt
Speaker 4: that happened in eighth nine. But bottom line is this,
Speaker 4: you did not have as many new homes going up,
Speaker 4: especially toward the back end over the last you know,
Speaker 4: when you look at demand, you didn't have quite as
Speaker 4: many houses going up anyway. You got a bunch of
Speaker 4: these different things, and and and and and a bunch
Speaker 4: of things kind of culminating and all pushing those, uh,
Speaker 4: those price of housing, that price of housing up. But
Speaker 4: but what I would say to jad Evance is that
Speaker 4: for the people out there that think pushing rates down
Speaker 4: is going to make housing more affordable, it probably won't.
Speaker 4: And the reason it won't is because interest rates are
Speaker 4: a function of price. Meaning if they artificially push rates
Speaker 4: lower and somehow manufacture lower interest rate loans, I would
Speaker 4: expect to see housing prices resume pushing higher.
Speaker 1: Yeah.
Speaker 4: Right, So that's the other thing. I think we've pushed
Speaker 4: this whole monetary policy thing about as far as we
Speaker 4: can totally agree, and I just I think that we're
Speaker 4: kind of at a place where we're gonna have to
Speaker 4: make some more decisions.
Speaker 3: And you know, everything does not always go up into
Speaker 3: the right.
Speaker 1: Last question, and it's a pretty simple one. Thinking back
Speaker 1: over the past let's say sixty days. I mean, you
Speaker 1: meet with a lot of people, you meet with clients,
Speaker 1: you meet with prospective clients, you sit on boards, you
Speaker 1: coach youth sports, youth football, You and your wife go
Speaker 1: to things. You go to church. I'm sure you attend
Speaker 1: other kind of philanthropic things. You get invited to people's houses,
Speaker 1: You play golf, So you're not a hermit. Honestly, in
Speaker 1: any time in the past sixty days, if you had
Speaker 1: anyone in any of those circumstances say to you, man,
Speaker 1: can you believe what this ice is doing in Seattle?
Speaker 1: I mean, this is literally hitler. If you had a
Speaker 1: single person expressed a single worry about ice.
Speaker 4: No, but here's the one thing I will tell you
Speaker 4: that's concerning to me. The most concerning thing about that
Speaker 4: pole is how misrepresentative it is to what you'll hear
Speaker 4: on the street and what you see in the news.
Speaker 3: And here's the other thing that it infuriates me so much.
Speaker 4: If that translaw was explained in plain English and put
Speaker 4: on the ballot in a way that the ice pole
Speaker 4: was put out there, I think you'd probably have about
Speaker 4: seventy seventy three percent of people in the state would
Speaker 4: have voted against that too.
Speaker 3: It's it, it.
Speaker 4: It is so infuriating to me that people do not
Speaker 4: educate themselves so more and will do not have the
Speaker 4: courage to speak up. That poll in Seattle tells you
Speaker 4: everything you need to know in my opinion, and I
Speaker 4: just people quit.
Speaker 3: Be in candies and speak up.
Speaker 1: I Y, yeah, I just saw this from Malcolm Glodwall,
Speaker 1: who everyone thinks he's this brilliant guy. He wrote a
Speaker 1: book called The Tipping Point, and everythin said he's now
Speaker 1: mister soothsayer, mister prophet of our age. Malcolm Gladwell recently
Speaker 1: said he's ashamed of having said in a previous panel
Speaker 1: discussion that so called trans women have a place in
Speaker 1: women's sports. He said he was cowed into saying so
Speaker 1: now he says so called transit. He says the word
Speaker 1: here's his exact quote, trans athletes have no place in
Speaker 1: the female category. Says you know what, He's still cowed.
Speaker 1: He's still saying that word. Yeah, you just wants argument.
Speaker 1: You Malcolm Glogwell years ago with the Tipping Point alone,
Speaker 1: and then his follow up to that, I can't remember
Speaker 1: the name of the follow up to that, and then
Speaker 1: the follow up to the follow up, and his consulting
Speaker 1: and his speeches and his ted talks come on is
Speaker 1: that worth twenty million bucks or something?
Speaker 3: Will look, I just think it's no. Yeah, one percent cowed.
Speaker 4: I we're at a place right now where it's controversial
Speaker 4: to say that somebody with testicles and a penis shouldn't
Speaker 4: be in women's sports.
Speaker 1: Yeah right, yeah, yeah, Well that pole does say that
Speaker 1: all about your separate country, and I know you live
Speaker 1: in a better part of that separate country. Always great
Speaker 1: to have you here. We'll make the twopole thing happen.
Speaker 1: We'll go back there and you can see this this
Speaker 1: home district. Sound good? All right? This is the Todd
Speaker 1: Herman Show. Zach abramises, I guess know your Risk podcast
Speaker 1: dot com. Now, please go, be well, be strong, be kind,
Speaker 1: make a decision today to walk in the light of Christ.