In the afternoon. This is Josh Arnold or Money Talk. Jett to Arnam here to answer your question on stocks, bonds, mutual funds. Now, you should position your investment dollars including your IRA in four o one k. But you do have to give us a call two nine five five six oh eight. That's nine five two nine two five five six oh eight. You always get straight talk, not your coded advice. Say. Before we jump in, we have to give the usual disclaimer. Everything we talk about in
the show is for discussion purposes only. Nothing should be considered actual investment advice. Some are all of the securities we discussed in the show may or may not be suitable for you. Please consult investment advisor before making any investment decision. Investing in the stock market contains numerous risks, including especially the risk of
loss. Jud who would have thought that over the course of the last six weeks that the price of oil, instead of being close to one hundred and fifty dollars a barrel, would be trading at seventy five dollars a barrel.
Who would have thought that interest rates over that same period of time would have dropped from you know, five percent down to four point four percent on the ten year treasury and who would have thought that earnings would have come in better than expected for many many sectors that have have have reported, well, it looks like Pol's. It looks like Poul's going to land the plane. I mean, I don't know if it's Pow was going to get more or less
credit than he should. This is going to be the first time in modern history that inflation was defeated without a recession, which suddenly makes the transient crowd right in the end, although I would caution they were not right in the beginning. Well, I would put myself in the transient crowd. Correct. Now we should point out a few things. The only thing of that laundry list of data points that you just gave that I think is surprising to people
is really the price of oil. Two major wars one in Ukraine Russia Russia of course control. I don't know if it's of course to me. I'm not sure it's of course to everybody. Is ten percent of global production of oil, so it's actually quite material. And you have a Middle East conflict with Israel, Hamas and Iran proxies going on, and you have the economy threat the needle not going into recession. Most people would say, all all sql, they would expect oil to be higher in that regard, and it's
actually lower. And I think the surprise has been extra supply growth from a few places and demand that has not correlated with economic strength, oddly, but so be it. It's oil. Nobody actually knows anything. And I say that as somebody who's covered oil for a very very very long time. Well, and you you are probably as close to an expert as Daniel Jurgen is. Well, you never try to predict the price of oil. You try
to find stocks with a good exposure profile to the price. Golden sacks out this week with a call on twenty twenty four oil saying oil will be range bound between eighty and one hundred dollars a barrel. Not really a novel thought. I'd say that's pretty consensus right now, but it's is a conundrum. I continue to think that oil is in a much better place than it's been for the last oh since twenty fourteen, but it will remain incredibly volatile,
volatile. So but let's talk about the other more important stuff. We can talk about the recent lows of the market where the S and P five hundred, which was up as much as nineteen percent year to date at one point this year only was up ten as of a month ago, and now we're back to up almost just shy of eighteen percent year to date. Now the equal weight index is only up three, which just continues the story of the
year that the magnificent seven stocks are the place. I really think, you know, as they say, the other four hundred and ninety three S and P stocks, I keep hearing, Well, it can't be just the magnificent seven. What about the other stocks? And they should be catching up, And the talking heads on TV, a lot of the prognosticators say, man, you you should underweight the seven stocks that have been leaders and overweight everything
else because they have to catch up. And they actually are doing quite well. And I kind of look at some of the other stocks, the other four hundred and ninety three stocks that are in there, and there aren't a lot of companies that I want to invest in. Well, I think one of the anecdotes that I shared on Twitter, which is a conversation you and I had earlier this week, is the four horsemen of the Internet Apocalypse from the late nineties. That was the market. People say, oh, that's
true. Thing, Microsoft, Intel, Oracle, and Cisco Systems system And of those companies since they hit, they're they're nator in two thousand and then fell. Cisco Systems is still trading, and Ciscoing Intell both below. They're both below where they were. It's Oracle, A long time to catch you
up. But I the point was less about where they're trading today. It's more that in multiple regimes, if you will, and that's the fancy word for moments in time, there are a handful of stocks that tend to lead the way, and that's kind of that's it. This isn't it's de ja vu all over again. This isn't that unique. You're not that you know. It's the it's the words the gen z doesn't want to hear. You're
not that special. Oh my goodness, you're not. Or they're not You're not that special, not that special, Oh my goodness, here it was. I thought I was very special. No, So I think from that regard, the Magnificent seven are up because they're the best stocks out there, and they they're gonna keep doing it until they don't, which you know, seems like a non prediction and a cop out if you will. But I guess our point is we see nothing that changes that leadership other than we'll say,
others call it government interference. And even with you know, a little government right now, these companies are still continuing to lead. Yeah, I think you're you're towards the tail end now of quote unquote government interference. I mean, Amazon's been sued with a ridiculous lawsuit. Google's been sued. They've all been sued. They're all terrible people according to the government because the government has to pick on winners. M I'm terrible. I know, I shouldn't.
I should You're not terrible. I've heard. I've heard that from a few people. You know that success, if you're successful, people want to tear you down. If you're a corporation and you're successful, the government wants to tear you down. It is what it is. I think that we have the rule of law and I think that's going to carry the day.
And I would point out, as you would too, that Lena Khan, the head of the FTC, the former Darling of Yale, and it is interesting that the Ivy League has lost a little bit of luster over the last month, and that's not necessarily a bad thing. And when when good idea is one of my favorite quotes is, and I say this as a state school kid, my favorite quotes is when bad ideas have nowhere to go but die, they go to they go to the Ivy League and become courses.
Well, I'll laugh a little bit on that. Ill, I will laugh a little bit on that. People in my experience, people will tell you where they're degree who lead conversations with I have a degree from, you know, this esteemed institution typically have far less to say than you would imagine. So so there take it, there you go, take it, take it, take it or leave it. I think looping back though to look, this was kind of a crazy market. We are just seeing wild gesticulations below
the surface. The S and P five hundred led by the MAG seven very very quiet, the IWM, which is the bottom two thousand stocks of the top three thousand in the market. So MidCap small caps seems to be up or down over a percent and a half every day lately. On fed on fed thoughts with the economic data points this week on inflation retail set, I for you know what, I actually forget what all the the data, No,
no, no CPI and people we had CPI and P right. All I know is right now the FED Future's curve, which predicts future interest rates, is took out all the increases this week and is now pricing in a cut as early as April. Well should we have a cut as early as April in interest rates? And I do not believe that that's going to happen, So somebody's going to have to replay this tape at that point in time.
I think the market could head down on that news because of the inference that if the Fed is now cutting rates, something's got to be wrong with the economy. Well, there's a lot right with the economy. But we're gonna have to come back and take a break, so we'll talk about all that's right when we come back. This is Josh Arnold, mister money Talk with jud Arnold here to answer your questions on stocks, bonds, mutual funds.
You should position your investment dollars including your eye and four O one K call us nine five two nine two five five six oh eight. You always get straight talk, not your advice. This is Josh Arnold Sister money Talk with jud Arnold here to answer your questions on stocks, bonds, mutual funds. Now you should position your investment dollars including your IRA and four oh one K. Don't hesitate to give us a call nine five two nine two five
five six oh eight. You'll always get straight talk, not your coded advice. Well, with a lot of a lot going on below the surface of the stock market and below what's been happening with the Magnificent seven, that being Apple, Amazon, Fate, Meta, Microsoft, Alphabet or Goo Goo, Tesla, and Navidia, there is or has been a lot of a lot of movement, uh, some movement in what I call the travel space,
led by Bookings dot Com and Expedia. Expedia hitting a new high this week, and that's still considered a cheap stock at least on a price to earnings basis. We've had numerous other semiconductor names have been doing quite quite well recently, and even some of the it looks like even some of the transports at
least have not fallen out of bed. And then jud you brought up the Russell two thousand, the IWM, which is a broad index of companies they have been or that had That index has been perking up a little bit, and I know you liked the deal. In some of the in the small cap arena, well caps in midcast we had a we had a good week this week. Well, I'm going to take it the Oncology Institute tick Er
TOI, which I have written a letter to. I offered to buy the company at a dollar twenty a share when the stock was trading in about sixty five cents. My offer was rejected, not least of which because I don't have one hundred million dollars to buy it at a dollar twenty a share. But I thought that was a detail that the CEO could overlook. And if you think I'm kidding, I actually did write the letter. I felt confident that I could raise the money at that price and lo and behold the stocks
now to two dollars and thirty cents after earnings. It's now where there's about a hundred million shares. That's been interesting. So I think this continues to be a very fascinating time for small and MidCap stocks that are displaced now with small MidCap. The difference between them and large cap isn't isn't just the size. The range of outcomes is far more dispersed. Where large cap stocks tend to be more correlated because they are big and more reflect the economy, the
dispersion of small and MidCap stocks is dispersed and varied. And what we often say is you can buy the menu for big cap stocks. You can do it. The empirical evidence says, if you buy the fifty largest cap index, you're typically going to make about eight percent with a lot of volatility, but you're gonna make about eight percent over time with small caps. You want to buy items on the menu, but if you buy the whole menu,
you're probably gonna lose money. Well, I just remember a long time ago, in a far away place when I was first starting out and I was working as a broker with a small brokerage firm that was big on bond oriented mutual funds, and I found, after moving my money from my stock related funds at that point in time to the bond related funds, that that was not a wise choice. But at the time I felt often want to recommend these things too potential clients, that I ought to be an owner of what
I'm recommending. So even back then, I ate my own cooking, and I found as interest rates went up, bond values went down, and bond funds got hurt even more than individual bonds. And I was searching around for alternatives, and I came upon two different mutual funds at the time that did well in that period of time. One was the Templeton Growth Fund and the other was a little fund out of Philadelphia at the time called the OTC Fund. The OTC Fund no longer exists. It was absorbed by t row Price
and probably somebody else. But one of the things I found from that OTC fund, which concentrated on a lot of small to medium sized companies, is during the worst economic period or period or the worst market period nineteen seventy three and seventy four at that time, these guys outperformed, as did the Templeton Growth Fund, because they were investing in the parts of the market that operated in and of themselves. So they were, you know, their businesses operated
as they did and regardless of how the economy was doing. So that was pretty a broad swash of can I can I summarize all of that stuff, because it is a long winded way of saying very simply one of the tenets of our of our view growth wins. That's it. Growth wins. Okay, I'll start with stress, a stressed, distressed debt guy. And even though I traffic in different stocks that you do, at the end of the day, we are trying to find stocks that grow earnings. That's it.
And we think value quote unquote. We would argue that we are value investors that you know, traditional value investors who you know the most pure form of people who look for net nets, which is the market capital stock is less than networking capital. That doesn't really exist anymore because people get smart to buying a company for less than liquidation value. But people often obsess over being a value investor in buying the cheapest, lowest pe multiple things, and we have
found that is not necessarily a path to making money. That investors tend to gravitate on things that can compound capital and grow over time. And that intellectual pivot that you made about twenty years ago has Stinney jud we're talking a lot longer than that. You're making me younger, which was okay, but fair enough, fair enough, this was before you were born, so to speak. Yes it was before you were born, but yes, that's when we made that judgment. It's it's held true ever since I got you, So
that that's it. I think from a macro perspective. You can hear the tone of my voice. Last week, we were frustrated and I was befuddled. This week, Oh yeah, you were. It's a frustrating now. The difference is you take out your anger through your voice. You don't do it through trading. Don't really do much on the tree, you know. I think less is more. That's something that you have embraced a lot longer than I have. And you don't need to be a hero. We talk
a bigger game, so to speak, than we trade. Find things we like and we're macro aware. So that's it. But we've got a quiet week next week, we think, well, I say we have. I actually want to say it's a quiet week because every week we got two wars going on, and nothing's been a quiet week. We have a short week.
It's a very very short week. Technically, you've got even though Monday, Tuesday, Wednesday or full market days Friday, the half day, I would say, it's really two and a half days of active activity and the rest of the week is going to be very muted and anytime there's muted trading that can result in a lot of volatility. Plus, he'd say, it's a very long weekend with thanks Thanksgiving and you have a big shopping day.
Next next Friday is big is Black Black Friday? Next Tuesday. A lot of technology investors are going to be focusing in on the earnings from Navidia. Uh. And I'll be looking at not so much the earnings of Navidia, which will be interesting in of themselves, just to see how chip sales are going in in particular chips related to artificial intelligence. But I want to do a recap of what's happening in Las Vegas over this past or this coming weekend,
that being the Formula one race, and see the after effects. I am a Formula one. I think it's a terrible idea. I think it didn't need to be on the strip. I think it's disruptive, and I think this is the only time it's going to happen. Now that said, I think Vegas is going to be successful despite this silliness. Well I don't. It's I think it's just another another we'll say, shout of an entertainment
on what is normally a very week a week weekend for for Vegas. I understand there's no week we can't well, we can agree to disagree on this one. I think it's anyway. We have strong opinions of loosely okay, on that note that we wish everybody a good Thanksgiving and a profitable market week. Yes we do. This is Josh Arnold, Mister Money Talk with Judd Arnold, always here to help you. Give us a call nine five two nine two five five six oh eight. As you can tell, we do
have opinions and we're happy to share them with you. Josh Arnold Investment Consultant is a registered investment an advisor located in the state of Minnesota. All securities discussed are for informational purposes only. Investing contains risk, including risk of loss. Consult your investment professional before making any decisions about your investment portfolio.