Good afternoon. This is Josh Arnold, mister money Talk with Judd Arnold here to answer your questions on stocks, bonds, mutual funds, how you should position your investment dollars including your IRA in four one k. But you do have to give us a call at nine five two nine two five five six oho eight. That's nine five two nine two five five six oh eight. You always get straight talk, not sugarcoaded advice. Before we begin, we have to before we begin, we have to say everything on the show is
for discussion purposes only. Nothing on the show can be should be considered investment advice. Some are All the securities we discussed in the show may or may not be suitable for every investor. Do not make any investment decision without consulting an investment advice. All investing contains risk, including risk of loss. All right, let's get into the show. Wow, Joe, that's I just love love how you do this. The disclaimer it is it is great stop.
I should have been a lawyer or or or now you're you're perfect with what you do. You don't need to be be a lawyer. You would not have have the ability as a lawyer to do all of the of faith, thinking and acting did you current currently do as an advisor or even before that, as a portfolio manager for a for a hedge fund, or when you worked for four different All right, an, let's get into the let let's get into the into the involved, because it has been a bloodied month.
September historically the worst month for the SMP five hundred. On average, the market loses one point one percent in September. We lost just under five percent this month. Well, as we have always said, Judd, during the course of any year, you're typically going to have three to four five to ten percent pullbacks, and this year, I think the pullback that we've
had in September was the fourth fourth such five to ten percent pullback. And we're not talking and we're just talking about the broad market, not any individual stock, because they are an awful lot of stocks that are down more than that, not only in the month of September, but if we go back to the July highs, we have numerous stocks that are in what i'll call correction territory or even bear market territory. Well, the s five hundred is
up low teens for the year. Now that's a market cap weighted index, the equal weighted index, so all five hundred components wait the same, is only up about one percent for the year. It has been a nothing of a year, so tough year. As always, we'll see what happens in September. I think the big news as we record this show, as we
usually do on Friday, big news. The greatest hedge fund manager, certainly of his generation, maybe ever, Dave Tepper out with comments Friday saying we are in a new paradigm, no more quantitative easing, which is a news, and making the point that stocks are kind of fairly valued at if you look at the S and P five hundred, which again is market cap waited about eighteen nineteen times earnings, or the equal cap weighted index is treating about
fourteen fifteen times, so generally inline with historical numbers, we've got high interest rates. Basically making the point this is where stocks are the market should kind of be here in aggregate, yes there's room for individual stock style performer on your perform, but if you're just buying the index, not a lot of people think it's going to really do much and certain what it just till the end of the year or going forward. Well, I guess he's saying going
forward or at least in the intermediate term. Okay, we're fifteen times earnings, he's said. If he's quoting an earnings multiple in anybody quoting an earning is multiple at any point in time and saying, well, the p's fair. What they're kind of saying is you're going to get the earnings growth rate you're not going to There's two ways to make money or lose money in a stock, right, There's the rate of change of earnings or the multiple at
which you pay for them. So when you do really well, the earnings go up and the multiple people pay for it goes up. That's what happened with Apple multiple times, but specifically from the time that Buffets started purchasing in twenty seventeen twenty eighteen, it's about ten times earnings. Now we sit here today, it's twenty seven times earnings, and those earnings are a lot higher, and that has led to what a three increase in Apple over the last
I don't know if five six years. Conversely, what he is saying is all right, the multiple that you're going to get for earnings inaggregate for the market isn't likely to go up. And I think that's been kind of a fair statement. I don't think it's a unique call. But anytime Temper says anything, people people like to see shadows because he's such a brilliant guy.
Keep in mind, individual market calls are really really hard, and who the heck knows, and he's gonna he's gonna express his best through individual stocks, bonds, he might buy commodities on right. I mean, Tempers an animal.
He can do anything. Well, I will. I will tell you that there have been an awful lot of very smart people from the beginning of the year and even till till now that have said the the market measured by the S ANDP index would be down and down significantly this year, and not only that, that we'd be in the in the throes of a fairly deep recession. Well, I said, that's proven to be the case. But I've seen these people, with all earnestness, you know, say that's that's
our conviction, that's where things should be. But they're not. First of all, nobody can predic macro, and macro is just a big picture where the SMP five hundred goes. Nobody can do it. So when you hear people, including us, saying, we think the market is gonna do this, we think it's gonna do that, nobody is a clue. All you can do is by individual stocks and long term, the number one driver stock
performance over a ten year basis is revenue growth. Now that's a little bit misleading because if you're growing revenues over ten years, that means you have to have earnings because you got to fund that growth. But this goes to one of our core tenants, which is growth. Growth wins. You don't know
when you're gonna get paid for it, but eventually growth wins. You've got to find stuff that grows faster than the market, or you buy it at a multiple discount to the market, and the market starts giving it at a higher multiple. But look, I think to add on to your comment that you just made, I think you can go a little bit deeper, which is, at the start of the year, people said, well, bond
yields have to rise, the Fed's tightening and whatnot. And I think if you told all those same people specifically that as we sit here at the end of the third quarter and the six month treasury is going to be at five point five five percent, and importantly, the ten year treasury is going to be at four point six percent. And let's just talk about the ten year treasury for a second. It is, as they say, on a stick,
treasury since the Fed meeting is going up one hundred basis points. Yeah, we are at period of fifteen year high on ten year interest rates might be a sixteen year high now, and ten year interest rates have a huge impact on stock valuation. So if you told those same people that they would be incrementally more bearish now, I'd say to counteract that, I will just
caution back to our whole thing that nobody can call the market. A person wiser than me, who I like, who's sort of an obscure oscure fella said, Look, every year I've been in this business, the market has done quote unquote weird things. It's never done what you thought you was going to do. So a lot of this is positioning and whatnot. People are generally bearish, And I'd say that's that's a pretty big indicator, which is
when everyone's barished, it's really hard to have a correction. Stocks tend to do what's called the pain trade, which is the exact opposite of what everybody believes they're going to do because they're they're embedded expectations. So long winded way of saying, just to recap, it's been a horrible September. The market on an equal weight basis barely up for the year Q four seasonally strong, but interest rates are a huge risk to this market, as is the price
of oil going up. We've got we're staring at a government shutdown, which always gets resolved, but you know, it looks like we're gonna have one, and the US don't know how how long this particular shutdown is gonna gonna go. The Republicans, to me, have shot themselves in the foot. And even though the Democrats keep talking, oh, you know, the government can't shut down, they're the people that have also voted against any continuing spending
bills. So you have the Democrats voting against that, you have a number of Republicans voting against any continuing spending spending bills. The Republicans are going to get blamed, and the Democrats are going to say, well, you know, all right, all right, were to vote. But I don't want to get get political here. I'm just stating what there's going to be a
shut the shutdown, they're going to resolved it. I see. The bigger fiscal thing is you have divided government number one where the Republicans called called the
House number two. They all spend like drunken sailors. We're spending. Part of the reason the bond market is out of control, and that's back end rates are going up so much is we're running deficits with three and a half percent unemployment of five to six percent of GDP, and we got to refinance a lot of government that I think about half government, half the government debt
outstanding has to be refinanced the next couple of years. And so the bond is well, we got it. Before you respond when yields are going we got to come back. Before we come back when yields are going up, bond prices are going down, and very few people talk about where bond prices are going and they're going going down and on that. We'll come back with more money talk after these important messages. I am Josh Arnold. Missed or
money talk with Judd Arnold. You have a question, you need some help, give us a call nine five two nine two five five six O eight. You'll always get straight talk, not sugr coded advice. This is Josh Arnold, mister money talk with Judd Arnold here to answer your questions on stocks, bonds, mutual funds, how you should position your investment dollars including your IRA in four oh one K. Don't hesitate to give us a call. Nine five two nine two five five six o eight. That's nine five two
nine two five five six o eight. You'll always get straight talk, not sugar coded advice. Yes, very few people Judd talk about bond prices, and the direction of bond prices is in verse two yields three years in a row. If you've been an investor in long term treasuries, you've lost money. I can't remember the last time that's happened. I've looked back. It has been a long time. If you own bonds, you've been obliterated. Now you hear people say, well, you gotta buy bonds now, you
gotta buy bonds now. When you lose ten percent in bonds, let me tell you it is hard to get your money back. We are not bond people. Some people are. Some people argue these so called sixty forty this is a superior way to invest at sixty percent equities forty percent bonds. We would just humbily say that doesn't always work, and it certainly doesn't work in a rising interest rate environment, and the ex think that you do make money
on bonds as interest rate interest rates fall. I would point out that the correlation between bonds and stocks has not held up. Typically they're inversely correlated, and we have seen in this environment, specifically, when the market is really sold off, it is sold off partially with bonds as well. As rates
have gone up. And when you're in this environment where people are really concerned about physical deficits by to six percent of GDP as far as the eye can see, with only three percent unemployment and tons of treasury debt to refinance, it doesn't look like a great time to be a bond holder. So I'll
give it care judging in the effort of being fair and balanced. Since we've said don't own bonds, I saw an article about if you were going to own bonds, take a look at buying bonds that are deeply, deeply discounted, and particularly bonds that were issued during the pandemic. The bond in particular that I saw talked about was buying a US Treasury that that was issued during
the pandemic that comes due in twenty fifty. So it was a thirty year bonds two bond at the time of one point seven five percent, and that bond is currently trading about forty seven forty eight cents on the dollar. So interest rates are going to put down, the bond will go up in value. Yeah, I'm going to go out and buy the bond. All right, let's just unpack this for a second. All right, if you buy any bond with duration that's more than a couple of years, you're taking massive
interest rate risk. And whether you buy previously issued bonds that are called off the run that were issuing, or a lower interest rates so the price goes down so that the all in yield, which is the combination of coupon press price appreciation that you get equals a yield that is attractive to you. Or whether you get a new issue bond that has a higher coupon and you're presumably paying a hundred and sells the dollar, you are still making a massive interest
rate bet and a massively on certain world. If you want to buy bonds, I would humbly say by the six months, by the three month, you can even go out to one year, you're getting five point five percent. And if you're wrong on interest rates, you're not to lose anything and then you can reinvest. Now, the negative with buying shorter term bonds is if interest rates move in your favor, meaning they go lower, you're not
You're gonna have reinvestment risk. But what we would say is great, if interest rates go down, stocks are going to go down, and then you can buy stocks and you're better off that way. A lot of different ways to skin the cat, but none of that is getting around the fact that if you are buying you know, two, three, four or five out to thirty year bonds right now, don't don't kid yourself. You're making a massive interest rate bet that nobody can call and you can. I'm not again,
I'm not, I'm not. I'm not disagreeing. I hear you, I hear you. I'm not a bond person. I've avoid go back to let's go back, let's go I happened like like stocks, and there are plenty of stocks that to me look attractive. Let's set the macro table because the things way on stocks and again the SMP five hundred, down four point nine percent for the month of September, one of the worst months. It was the worst month of the year. I think over the last couple years
it's been one of the worst months as well. Historically it's terrible. I mean, five percent loss for the marketing and aggregate is just a brutal month. The equal weight SMP five hundred, that's all those stocks weighed equally is barely up for the year. I think it's up one percent. So what's weighing on stocks? Oil prices are going up. Bond yields long term, which we've been talking about at great length, are going up. Higher yields
are bad for bond prices. Broad yields up, bonds down. They're also bad for stock valuations because stocks are merely the present value of future cash flows, and if you have a higher interest rate, you are discounting the future at a higher rate, leading to a lower stock price. All that being said, and then, and let me not forget the government shut down, the u W strike. There's more bad stuff than I'm forgetting. China is a bad asket case. There could be war in Taiwan, Ukraine. There's
a lot of there's a wall of worry up there. At some point it just doesn't matter. And you did see the market try to rally this week at rally Thursday, try to rally Friday came back on comments from David Tepper, the noted hedge fund manager, saying, you know, we're kind of fairly valued, but stocks generally over the long term go up seven hunt of ten years, they go up. Our nice to go up. Find good companies and buy them. That's that's really it. And a lot of things
have come back a lot more than the five percent pulled back. See, it's not that complicated. Oh okay. I also think there's a there's a huge point as well, people the doomsayers, and there's a lot of doomsayers out there. It's really doomsayers, as you've said, always sound a lot smarter than we sound. Look, I think the biggest thing for the doomsayers is that I would push back on, is the probability of us having a
credit event. A credit event being Lehman Brothers goes under lunch from Capital Management in which we had I think that twenty year anniverse, thirty year anniversary of l twenty five year anniversary of that it's really hard to have a credit event right now. You look at it, the federers or has all these emergency facilities, and you know banks are hitting those to finance sort of their bond issues. So it's unlikely you can have another Silicon Valley bank corps. And
it just it just doesn't you don't see it. Credit spreads, which is the incremental interest that corporate tech to pay over treasuries or over their sovereign rate, are really not blowing out at all. So I don't know, I just I don't see some larger events. So as we as we have said three to five, three to four, five, five to ten percent pullbacks a year on average in the market or in the middle of one, these things happen, okay, onward and upward, onward and upward. It is
well, it's it's it's very interesting because you've brought brought us up. The price of oil continuing to move high year algo. On Friday it did pull back from ninety two dollars a barrel down to ninety dollars a barrel. We've seen Exxon hit a I'm guessing it was an all time high. But most most oil stocks, particularly the E and P companies are still significantly below their
hides from last year. On the flip side, the service companies have been moving up and are if not at highs, close to close to highs. But I did see something at a headline today in the Wall Street Journals today being Friday when we record the show, that the number of drilling rigs,
particularly in the Permian basin and maybe elsewhere in this country are down. While you said it all, and I've said this all year and most of last year, which is E and P, which is the guy exploration and production companies, those are the guys who get shale, getting shale oil whatnot. It's a terrible business. Shale oil is peaking. It's you got to recycle your capital every two or three months. It's terrible. De stuctuated five times
earnings. They all have questions on reserve life, which is why their multiples are so low. People don't see more than ten eleven years of reserve life. Conversely, the international guys like Exxon and the services companies that are exposed to offshore oil, which is where I've been concentrated. The offshore services companies, the trailing rigs in the boats that go to it. We're talking about
tidewater rig Alaria's Noble seed drill. That's a growth area and it's a long duration asset, and that's where the quote unquote action is going to be. I'd say, more broadly, post Ukraine, the administration, the US government administration really you know, emptied about half the strategic Trollium reserve, got oil down to seventy bucks. They said they weren't going to cover, They didn't cover, and now oils back to ninety five. They're on the moves and
they misplayed it. MB asked Muhammad about Ben Salmon and Opack. They completely outplayed the US and rightly. So they play an infinite game. We play a finite game, and I think oil is I mean, look, you can go up or down. I think eighty is a pretty good floor, which means these energy companies are going to do pretty well if you're in the right ones. Though you got to avoid the shale guys. It's just not a growth industry. But we'll talk more about this when we come back.
This is Josh Arnold, Mister Money Talk with Judd Arnold here to answer your questions on stocks, bonds, mutual funds, how you should position your investment dollars including your IRA in four oh one K, don't hesitate to give us a call nine five two nine two five five six oh eight. You have a question, We have an opinion. Nine five two nine two five five
six o eight. Josh Arnold meant for money Talk with Judd Arnold here to answer your questions on stocks, bonds, mutual funds, how you should position your investment dollars including your IRA in four o one K, don't hesitate to give us a call nine five two and nine two five five six o eight. That's ninety five two nine two five five six o eight. You always get for those who invite, for those who missed the beginning of the show.
Everything we discuss on the show is for discussion purposes only. Nothing should be considered investment advice. Some are all the securities we discussed on the show may not be suitable for some are all. Investors do not make any investment decision without consulting an investment advisor. Investing contains risk, including risk of loss. All right, let's get back to it. We're talking energy. It's unhinged. It's look. I think everybody has to want a little bit of
energy because oils in a new pair. In many ways, it's sort of the offset to you know, the twenty ten to twenty twenty period where I think we're gonna mean the ascended bull market. I think we're structurally short oil. And when we've seen that those periods of time in my career and before my career, it takes a recession slash, you know, big depression to really get the capex cycle on the right side and get to a place of excess first or I should say surplus first deficits. So you know, the
US we emptied half the Strategic Petroleum Reserve and it hasn't done anything. I've never understood that other than as again, we don't want to be too political here because as you said, we like to be Switzerland when it comes to politics. But the only reason that this administration depleted the Strategic Energy Reserve was for votes. Got to bring down the price of gasoline at the pump.
I think you need to segment that into two places. You were rational to start using the Strategic Petroleum Reserve at the start of the Ukraine invasion because keeping mind, Russia is twelve percent of global supply, and when when oil jumps up from you know, I think it was sixty seventy bucks before the invasion
to one thirty that's when you're supposed to use it. I think where I have a lot of heartburn, and a lot of people do, is three months after when the world normalized, and they said, we're going to keep liquidating it for another six months to drive the price down past you know, from one thirty first to one hundred. Then we're gonna drive it down under
seventy. And we have this quote unquote master plan. And I say that, you know, moving my fingers and rolling my eyes, that they said, well, we have to create time for the US producers to come back online and respond. And I'm to say to myself, but what on earth are you talking about. This administration doesn't want more US production Number one. Number two, None of the US guys are going to produce into this while you're dropping the price and hosing them. And even if they wanted to,
they can't drill that much. And you see the administration out on today Friday, we record this on Friday announcing over the next five years they're only selling leases for three blocks of offshore in the Gulf of Mexico as opposed to demand for twenty five and you're taking a victory lap with environmentalists in the same time that they're complaining to OPEC about restricting supply. You can't talk out of both
sides of your mouth. I mean, I guess you can't, But you know OPEC and OPEC plus which would be you know, effectively the Saudis, the Emiratis and the Russians as well. They've played this one beautifully, and they didn't have to play at that beautiful given where we are with the supply situation, and global demand has been incredibly resilient. So I think we're just in a world where oil is just going to be more expensive, and we
have expressed that beat through the offshore drillers. I don't think the US on shore producers that's like your Devin serogies, are a great investment. I think shale is a terrible investment. Quite frankly. It's just a hard thing to get. You're recycling your capital every two three months, and that's just a hard business. It's short duration and whatnot. So we've seen the off show
joilers work really well. I think that keeps playing out. We're entering a winter, So I think llen G is going to keep playing a big role as well. That's ticker NFE or ticker LLENG. But I think this is just the world we're living in right now. And for equities that aren't energy, that's higher inflation, lower consumer spending. It's something to adjust to.
Now, let me just step back and say something before we go off the deep end here, which is from twenty ten to twenty fourteen, oil averaged one hundred dollars a barrel, and that's when one hundred dollars used to be worthsome you know, you're one hundred dollars from twenty fourteen is probably you know, one hundred and fifty bucks today with inflation. So it's not like the world in the US can't operate with one hundred dollars oil, and it certainly
can't. But from a portfolio standpoint, it makes sense for people even if you don't like energy. We are in it what's called the commodity cycle, and so we're not and these things can go on for seven, eight, nine, ten years, where these commodity companies just earned twenty thirty percent. It turns on capital for a long period of time, so what would be say, jed what would be wrong? Then instead of investing in we'll say a tide water or trans ocean, or we'll say a Valero or a Noble
or an l n G or an NFE. If you just went out and bought the commodity commodity itself or one of the exchange traded funds that tracks energy, well never yeah XL X P O I H. Well you've got that. Then you have a d a dog boy Edward and Uncle Nancy George. All right, let's talk about the commodity first and then well we'll get to you know, a broad commodity index. Okay, the commodity, the commodity
itself. I don't like those things because let's just take oil oils, what's called the static variable, and so it goes up and you're gonna make money in a linear fashion and you're gonna lose money in a linear fashion. The beauty of stocks, when you do do them well, is because of their
duration is so so infinite. As long as you get something with duration, you want something that works if the price of oil stays where it is or it goes even if it goes down, you want something that can work, and that's really what offshore is. So you think about the range of outcomes. You buy oil today and I don't know, ninety two dollars a barrel, I don't know where it goes. You can go up ten, down ten, and you're gonna make a little money. Maybe you want I think
that's a really hard thing to call. The guy's exposed to offshore cap bacs at sixty dollars oil are going to make a ton of money, and the stocks are pricing in what I would consider to be thirty dollar oil. So I think you're going to make money on more earnings and on the multiple that you're paying for those earnings, and you're going to have an asymmetric or in other words, that convects that meaning you have less downside than you have outside.
And that's what you can create with stocks. Now, in terms of some of the things you've you've mentioned right there, let's take un ung is the Natural Gas Fund. It's a terrible investment. It's buying futures. Well it's not. It's not just that it's been slaughtered. It's a structurally disgusting, awful, terrible fund, and it should be illegal because it's rolling call
options and put options. So every month you pay the premium, you can't know you it is mathematically impossible to make money on that thing, even if you're right on your commodity of view, if you hold it more than a week because the big as they say, the cost to own because of the option premiums is massive. Can't own it? That would be That would probably the same for oh as well. Well. Oi H is the Offshore Services Index, which is a mixture of oil. Yes, you don't want to
buy any etf of the commodity. Now you're talking about the ets. The stocks you can do that. You know. You can buy xl E, which is the big caps, it's mostly Xon and Chevrons. You can buy oi H, which is the services index, and that's mostly Slumberge, Haliburton, Baker, Hughes. These are all fine investments. We go further, we buy individual stocks. So I think the off shore ones are gonna be the best, and they happen the best, So I'll take that victory.
Lax there, Okay, that sounds that sounds good. I like I like that. I like that real quick. What about real estate? And it's really hard to make money? Yeah, it's really hard to make real estate make money in real estate investing through the public markets. Most of the returns belonging in the private market, and so most I can't think of a reat that's ever done really well, and they got a lot of restructuring. So I think that's a tough one. Do you want to buy real estate,
go do it in a private way. Doing it in public ways it has a lot of costs. And like I said, I've just never seen anything work really well in real estate in the public market. It was interesting though. We saw Barry Sternlick today, as he's done for the last year, complaining about the Fed, the Fed, the Fed, the Fed. He's killing the real estate market. Interest rates or rob cap rates are up. Everybody bought a four cap He's getting slaughtered. All commercial office buildings are going
to go to zero. A lot to do include I think, I mean he he operates, uh, he operates a a fun a lot of capital uh and Starwood Capitals. You know, stock price has not has not gotten slaughtered. Now, he's got a very nice dividend on on that. It's too high for me to be excited about, but I his his thing is a rate as a mortgage finance rate. I know he's talked before the he's sitting on all this cash to buy things. When the world blows up.
Well, well we'll see what that happen. We'll see if that happens, what we got to come back, though, we we do come back. When we come back. I do want to talk about some large capitalization tech companies that are under fire by the government. This is Josh Arnold, miss your money. Talk with Judd Arnold here to answer your questions on stocks, bonds, mutual funds, how you should position your investment dollars. Call us nine five two nine two five five six oh eight. You have a question,
we have an opinion. This is Josh Arnold, mister money. Talk with Judd Arnold here to answer your questions on stocks, bonds, mutual funds, how you should position your investment dollars, including your IRA in four oh one. Tight, don't hesitate to give us a call. Nine five two nine two five five six oh eight. That's nine five two nine two five
five six o eight. Well. For the last three weeks, the Department of Justice has been or has put Google or Alphabet on trial for being a monopolist in the area of search, and this past week, the Federal Trade Commission under Lina Khan Is filed suit against a favorite, Amazon for being a monopolist in online retail, for operating a super store online. I think both of these suits are i'll say suspect to say, to say the least.
But in the case of Amazon, you know, the FTC has said that Amazon has seized control of much of the online retail economy and what they don't they don't offer any solution, but they are five filing suit saying it is a monopoly, and they don't don't treat their Amazon's competitors fairly, and all this could lead to higher prices even though consumers have experienced lower prices on Amazon. I'll just say this, there's a whole difference between theory and practice.
And you see the the FTC's chairman, Lena Kahn, I'll say this FTC suit seems to follow I'm not gonna say verbatim, but pretty close it does. She wrote that when she at Yale loss in the Yale Law Journal back in twenty seventeen, called the articles called the Amazon antitrust paradox. Look, she's gotten absolutely obliterated in every litigation that she's pursued since she's taken over, Chairman, I mean, absolutely obliterated thought of the room. Why let's talk
about why for a second. All right, American law is based on precedent starry diseases. The thing, the area of law that may have the most precedent of any area of law is antitrust law. Every year, there's hundreds of mergers that are litigated. You've got all this regulation from that has been enacted by Congress. And what is anti trust? What is not her core losses? This one included deviate from that precedent and established law. They invent
new theories. So let's just start at the very beginning, which is, if you believe all this stuff, the avenue to do that is through the legislative branch, not through the administrative acting in the judicial, but in court. The idea that you're going to get these judges, specifically anti trust judges, to side with you when they have to overrule VOLUMEUS precedent. It's not
just oh, we have let's take the abortion case. Oh, in nineteen seventy two Roe v. Way, there's a precedent, bl blah blah blah. And then right, after that, you know, in nineteen ninety one or nineteen ninety two, I forget what was the follow on abortion ruling, not Roe v. Way, the operative casey, thank you, So it's really abortion. We've had all this back and forth literally over two cases. Okay, one from in a row in seventy two casey, I think it
was ninety two or ninety three. Okay, with anti trust, you have six precedents a year on most arguments. You just like these judges, and they haven't everything that she's brought, and that the fundamental argument that she's making is so ridiculous. Let's just break this down. Okay. Amazon has forty five percent market sharing online advertising. The FDEC is arguing, wait for it,
that they have a dominant, exclusive, exclusionary market position. So they have to go in in court and they have to say, look, it's forty five percent, and Walmart's a week competitor, targets a week competitor. I can go down the list. I mean Amazon share of total retail. That's the other thing. They need to establish that online is a distinct and separate segments. That that is that is part of part of her case because
I've I've heard her interview. That's just her case that online retail is separate from all retail. Amazon has maybe six percent of total total retail. The biggest retamper in the country is is still Walmart, uh, followed by you know, any any number of number of companies. And if I talk about Amazon share of online retail, it is it's actually below below forty percent of online retail. And the growth of alternatives to Amazon in terms of online are
many, starting with Walmart's growth and on line. I think their growth in the last year is in the mid thirties for their online business. You have shot the pent. But hold on, hold on, it's not about the percentages. That's the thing she's going in and arguing, well, here's the percent here's the percent, all right. Microsoft, which had an actual monopoly in office, the most landmark Ranta trust case probably the last twenty years, which the government ended up losing in the end, by the way, and
this was the Netscape case, which is they bundled with Windows. They bundled off Microsoft Browser for free, and that killed Netscape. Okay, there was no alternative to Windows. You don't have a choice. The idea that they're going to march into court, and they're going to convince the judge that consumers can only online shot from Amazon and no one else. When you whip out your phone, plug in anything, people, Amazon's market shares reflective of a
better at a lower price. It's not a monopoly if they raise prices ten percent, does Amazon a pricing power? No, that's what a monopoly is. A monopoly is you can raise prices and your market shays stays the same. Amazon's entire market share is predicated on getting the stuff to you quicker, i e. A better customer experience and better price. If you take any one of those two things away, it's not a monopoly in any classical or
modern sense of the word. It's a ridiculously stupid case. It's unbelievable. It's a total waste of government resources. They are going to lose, and
they are going to lose badly. It's well, well, yeah. One of the things that I had to laugh about was there was a section in the complaint just so people realize how ridiculous this is, a saying that Prime, the subscription based Prime service, was monopolistic, and because they quoted some Amazon people in positions who said yes, the goal of you know Prime, it's not so much what you pay, it's once you pay eighty bucks for Prime, you mentally want to shot more on Amazon. And the FTC case
makes it this is some sort of nefarious one off thing. You read this and you say, okay, so what do you say, Sam's clubs to illegal cost coz illegal? What like? Really really their monopoly? They have a monopoly and exist because you opt to pay eighty dollars for Prime. Oh well, if I take that at the step further, my running store u t tcuh TC running offers a discount by joining the TC run Club. So I've joined the PC run Club. I get better, better pricing because I'm
at the TC run Club. Do you think I'm gonna go to another running store? When I guess you would if you would keep it right now, here's the last thing. If it's a monopoly where the monopoly profits, there aren't any. Amazon's lost money in retail up until six months ago, two years of losses, there's no and it's never really made money. You look at the segment, it's it's very very slim at Amazon retail. It's what a waste, you know what this is what this case is gonna do.
It's gonna do two things. It's gonna be the downfall of her political career and it's gonna be the start of her academic career because she's gonna be hailed. She didn't get toasted in the Harvard and Neo faculty lounges for the rest of her life. It's just a total choke. Anyway, it's been We got a lot coming up at the end of the year, last quarter to go. We're fired up. We think the market's awesome. Well, I wouldn't say awesome. We think there's a lot of opportunities give us. There
are plenty of opportunities out there. Let's just have to pick and choose. Say this is Josh Arnold, mister Money. Talked with Judd Arnold. Always here for you. You have a question, We have an opinion. Call us nine five two nine two five five six oh eight. Josh Arnold Investment Consultant is a registered investment advisor located in a state of Minnesota. All securities discussed are for informational purposes only. Investing contains risks, including risk of loss.
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