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 and four oh one K. Don't hesitate to give us a call at nine five two nine two five five six oh eight. That's nine five two nine two five five six oh eight. You always get straight
talk, not sugarcoaded advice. As always, before we begin, do remember that this this show is presents our opinions of stocks, bonds, mutual funds, and how we view the marketplace. All investments opinions our RS and rs alone, or opinions that we share with our clients, none of this constitute's investment advice. All investments have risk associated with it, including the risk of loss. Before you take action on any of our any of anything that we
discuss, please consult your financial advisor. Many of these investments may or may not be suitable for your situation. Caveat empoor. This is Josh Arnold, Mister money Talk. Judd is in New York this week to cover the Barkleys Energy Conference, but much has transpired this this week. It was not only back to school for many coming back from labor Labor Day holiday, but also the return of the varsity or as I've said to the varsity traders to the
market place. Volatility did increase a little bit, as measured by the volatility index. Option activity also increased. And all you have to do is look at the stock chart of CBOE, the Chicago Board of Options Exchange. Much of the volatility or to meet the volatility index may he have dissipated this year
due to the advent of zero dated options. These these options track the daily and I do say daily movements of individual stocks and or indices, and in any option transactions, at least two of three of the parties are going to make make money. You're always going to have the exchange making money on making the trade, the broker who executes the trade is going to make make money on the trade, and you may or may not make money. And as
the saying goes, two out of three ain't bad. But in light of options activity increasing at least based on zero data options, that may have an effect on the volatility index being as low as it has has been, and
of course that is my estimation. We have seen a continued uptick in certain commodity prices and in particular energy prices, primarily oil has been ticking ticking up, and Judd's assessment from participating in the Embarkment's Energy conference and speaking speaking with many energy executives and attending different companies presentations was that energy and exploration companies may not be the place to invest, but the place to invest in Judge Judge
view is to stick with the infrastructure companies primarily rather than the will say, rather than the drillers. The infrastructure companies or companies like tide Water which provides will say services Hall in Britain, Schlumberge trans Ocean, which provides ocean going rigs, and it is believed that the cost of those of operating those rigs, or the rents to operate those rigs that are will go to the companies
like a trans Ocean or a Tidewater will start going up. Judd is also partial to New Fortress Energy, which is involved in development and transhipment of liquid and natural gas, and that would also extend to Shanneer Energy market symbol is l lnng uh. These companies, jud Fields offers offer some pretty good upside with some some down downside protection. Maybe I've been I've been very hesitant in dealing with energy companies other than a few that I'm very uh familiar with.
But my view is more on the we'll say development side, looking at companies like local Northern Oil and Gas, which is a company that I have followed for twenty twenty plus years, and they're more involved in we'll say the real estate around oil, and Northern Oil and Gas has slowly but steadily been moving up. Plus it pays a very nice dividend, and it's on the cheap
side on a price to earnings basis. I have also liked a small producer that focuses more on natural gas drilling in the Permian basin and elsewhere, Comstock Resources. But that's that's a much more speculative energy play, but could be very very interesting. And there are some people that look for yield in the energy field and they concentrate on companies like Energy Transfer Partners or Kinder Morgan, which are more pipeline operators and they'll generate much higher, higher yields and still
give you some energy exposure. Energy Transfer has been buying by shares on a regular basis, so management obviously believes that their shares are quite quite inexpensive. I've been hesitant, i'll say, to look at some of the pipeline companies because of an extremely bad experience that I had many years ago with Kinder Morgan, and they're cutting their distribution in half, which cut the stock price also
in half. Since that time, Kinder Morgan's stocks, i'll say, has traded pretty close to where that pretty close to where it was when the dividend cut occurred. And right now, numerous i'll say big money is starting to shift into energy energy stocks as they see the price of oil moving up and moving up significantly in the in the last several weeks, particularly after both Russia and the Saudis and OPEC proposed a voluntary ha ha, a voluntary million barrel
a day cut in production. I'm guessing that part of that cut in production, they need the money and to to drive out some of the short sellers that have been in the energy space. Meanwhile, the response that we've gotten here in the United States, which happened happened this week, was not an increase in oil and gas production, although that might happen with individual companies, but the administration's viewpoint was not to encourage more energy production, to encourage more
energy independence. It was instead, we're going to cut leases in the anwar. And I say, why kind of nonsense is that? What kind of nonsense? If you want to be energy independent, you don't just need solar and wind And the amount of money that's going into solar and wind wind projects is astronomical. And the last time the government pushed that kind of money into will say solar projects especially, that did not end well for government investment.
All you have to do is look up what happened with a company called Celindra. But more on that as we proceed. You've got plenty to cover, so stay tuned. This is Josh Arnold, mister money talk that Judd Arnold do give us a call nine five two nine two five five six or eight. It says Josh Arnold, mister money talk with Judd Arnold here to answer
your questions on stocks, bonds, mutual fonte. You should position your investment dollars including your IRA in four oh one K. Don't hesitate to give us a call at nine to five two nine two five five six o eight. That's nine five two nine two five five six oh eight. You always get
straight talk not sure coded advice. Judd, as we said it during the first segment, is been participating in the Barkley's Energy Conference, and energy or energy stocks have been been on the move, particularly recently since OPEC and the Russians have decreased the amount of oil that they're going to produce by one million barrels a day. Don't know how long this is going to continue, but
definitely they need they need the money. The response from the current administration here in the United States, well, let's cut cut production and let's cut leasing any of the energy reserves in a small portion of the Alaska National Wildlife Reserve. This wildlife preserve was specifically set up for for energy development, among other other things, and drilling or leases in that preserve are a cheeny fraction of the entire preserve. I once did a study, now this is many years
ago, of where the drilling take place. And if we were to take a map, and we'll even say, take a map of Minnesota and say that's the Anwar and then put a dot maybe over Southdale in a dina, that's where the drilling would take place. So a very teeny area in Anmar. But if that were to be developed, or more oil or natural gas could be developed here in the United States, we again could return to energy
independence. I do know that with a push towards wind and solar, you start becoming dependent on I'll say, countries that are not necessarily friends of a of a America given some of the minerals that are needed for that development. But that becomes another story. And not that I'm against using wind or solar for energy development. I just think the costs associated with that and the net energy result are minimal, particularly given other sources of energy right now that are
far less expensive, including the development of natural gas. That said, energy stocks have been moving up quote unquote, smart money has been shifting assets to that for the time time being as they see the price of crude oil march in the last month from seventy dollars a barrel to eighty four dollars a barrel, and people have seen the price of gasoline at the pump jumping up sixty sets. Now when it comes to price of that the pump moving up.
We do have the Federal reserve meeting come in in two weeks, and the Federal reserves potential move or non moving interest rates currently is on the minds of many market market participants, particularly given that earnings from companies are now going to be few and far between until we hit it, we'll say the second week
of October. So macro issues will tend to overshadow micro issues. So what's going on with the FED, what's going on with world economies is going to overshadow what's going on with individual companies in terms of how people look at the market that has that, and the end of a fiscal year will say for numerous mutual funds where they're going to balance out their gains versus losses, which could could mean a lot of selling takes place in the market before that money
gets reinvested come October. Is something to to pay attention to. But when we talk about the price of a gasoline at the pump moving up next week, we have a producer price index number coming out and a consumer price index number coming out. Both of those numbers could be up. I'm not going to say higher than expected, but the likelihood of them being much lower than
expected, I think is on the low side. The CPI be bear in mind, is one or one third of that is the cost of housing, or we'll say equivalent rents, and given that mortgage rates are higher and the price of houses still has not come down, and given that rents currently i'll say across the United States, not in all sectors, because I have seen some reports where certain cities in the country rents are starting to come down because
of a glut of apartment building. But we'll say equivalent rent is still going to be high. Energy costs, particularly with the price of gasoline moving up, are going to be high, and the price of energy flows through to a lot of other products, so we might see a tip up, tip up there. And then you can add in wage costs, which are still on the high side. Add in that you've had a number of union contracts either coming do or will come do, and those union contracts are also going
to be up. The only place where I have scene or heard of wages coming down is from Walmart this week, which said that new hires in certain certain areas the company will see a decrease in an hourly wage, and Walmart saying they're doing that to provide a more balanced view for all new hires getting the same same wage. Walmart's minimum hourly wage is lower than Targets or Macy's cost goes or favorite Amazon. But Walmart's stock has done very well recently and
has hit at a fifty two week high. But concerns are going to be this week, what is the producer price index going to be and consumer price index and how that could affect the FEDS thinking into the next meeting. And whilst numerous FED governors have been speaking yes, they have continued to say rates are going to stay higher for longer, Yes, we're going to be more data dependent, and yes right now, right now, as in September, it might be time to take a pause to see the effect of what they're
they're doing. The market could get a little concerned if the CPI and PPI numbers are a little high. Pay attention, and one of the things that we have suggested is in more VOTO months, you do have an opportunity to buy shares of favorite companies that have been discounted, and that is why we've recommended it keeping up to thirty percent in cash just to take advantage of any
of the pullbacks that occur during the course of any year. Typically we see three to four, five to ten percent pullbacks cause for any number of reasons. So again with September being a more or i'll say normally being a down month in the markets and being a little bit more volatile and more macro concerns overtaking micro concerns. It may be wise to have this cash and then again
take advantage of some of these pull backs. This is Josh Arnold, mister money talk with Judd Arnold here to answer your question on stocks, bonds, mutual funds, how you should participate in your investment account. Don't hesitate to give us a call at nine five two nine two five five six oh eight.
This is Josh Arnold. Missed your 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 give us a call at nine five two nine two five five six oh eight. You always get straight talk, not sugar coaded advice. So we've got energy prices on the on the upside do primarily to the price of oil
rising. Part part of that has to do with the FED or to be part of that has to do with the Saudias and the Russians cutting production A million barrels of oil a day. Part of that has to do, in my estimation, with the administration's policy of cutting leases for drilling here here in the United States. And of course you do have with we'll say, more
demand for energy and lower availability pushing up prices. I have seen a number of strategists now calling for oil to reach or trade between eighty dollars and ninety dollars and possibly going up to one hundred dollars a barrel with some of this, with the shortages, and you know that could be a positive for energy companies. Me, I'll say, unlike jud I am a little more cautious on that particular sector. Judd likes the infrastructure companies involved in energy, including
Tidewater, trans Ocean and New Fortress Energy. If I was forced into that area, like some smaller producers including Northern Oil and Gas and cost stock Resources. But more to the point, I'd prefer investing in companies involved in the Internet, leisure businesses, other real assets such as real estate, and China related companies. And boy, I'll tell you when it comes to China.
This week, news from China definitely had an adverse effect on my largest holding, my client's largest holding, probably my favorite long long term holding, Apple. Apple stock was down a little over four percent this week as concerns came, and concerns came big on reports first published in the Wall Street Journal and then published again in by Bloomberg News that China was going to be banning the
use of iPhones by government workers and workers at state owned enterprises. This caused a huge sell off early I'll say, in the middle of the middle of this week, I'll say on Wednesday and Thursday in Apple stock, sending it back down from what my market technician Chris said the work said was the initial breakout level at one hundred and seventy dollars a share, not that many many
weeks ago. Now, a few things with that part, and I say part could be associated with news of China banning the use of iPhones by government
officials and government workers and maybe and also in state owned enter prizes. They're also could be fear that China would ban and or could ban sales of iPhones within in the country as a means of retaliation against American companies and particularly against a big American company, and the retaliation of it is against or thrown at Apple, you know, could be given to the US's banning of Chinese company or phone company Waowei several several years ago that I don't know, but it
seems as if this reported ban and I say it's a reported ban, but it could be a little bit more than that. It could be an extension of a band that already had been in existence in China, at least as applied to government officials not using an iPhone, but using a Chinese, Chinese manufactured phone. But this reported band came came out simo almost simultaneous with the release of Huawei's new upscale phone called the Made sixty and Made sixty Pro,
and came during Secretary of Commerces Ramundo's visit to China. And I think the Chinese wanted a little more leeway in opening up markets than the Secretary of Commerce I was willing willing to give. But it just seemed a little bit too coincidental. Now, Whawe's new phone, and I'm not sure the cost or the specs specs on this is supposed to I'll say, according to reports, it is supposed to be not completely competitive with the iPhone, but we'll say
good good enough for many people. Well, I don't know whether good enough was going to cut it. But all of this came out within a week of Apple having their big event, which is next Tuesday, to introduce the iPhone fifteen and some other other products. Now, typically Apple's stock price tends
to move up into this event and sells off after the event happens. Now now the stock is sold off and sold off significantly prior to the event, and I'm I'm not sure whether the event is going to boost the stock price significantly, at least until Apple's earnings report comes out in October. In October, but it would seem to me that while not much has been leaked about the iPhone fifteen, it may not be a big leap from the iPhone fourteen,
other than the price might might increase a little bit. My guess also is the new iPhone fifteen will probably have some improvements in their camera, will have improvements in the speed, and for phones that are sold into Europe, instead of having their lightning port, it's going to have a USB C port. But I, unlike some analysts, think that Apple is still going to
be selling a significant number of phones during the course of the year. Do bear in mind, they're about one and a half billion people that own iPhones around the world, and they're over two billion active users of Apple products around the world. It is believed that somewhere between two hundred and fifty million to three hundred million iPhone users have not upgraded a phone in the last four years,
so they might still have a fairly significant upgrade cycle. I would also point outfit if there was a ban in of in China of selling iPhones, still a lot of people that own iPhones and like the iPhones and will continue to utilize and or buy products or services through those through those iPhones. And policies of course, could could change, and maybe that ban is more informal
than than formal that we do not do not know. But if in fact Apple does lose some potential buyers to the Huawei phone based on price or nationalist instincts, I'm not of the belief that the loss is going to be significant. On top of that, I am of the belief that Apple's expansion into other markets, notably India, where they have I do believe a six and a half percent share of the phone market, and they are now manufacturing phones
in India for India as well as for export elsewhere. I think Apple could make up more phone sales there than they lose in China. So I'm still very bullish on Apple on a longer term basis. I do have a two hundred and fifty dollars price target on that based of course, on the earnings multiplied by a pe right around thirty thirty and I still come up with two hundred and fifty dollars a share, and unless things significantly change, I'm sticking
with that. Say, this is Josh Arnold, mister money Talk here to answer your questions. Do give a call nine to five two nine two five five six zero eight. This is Josh Arnold, mister money Talk with Judd Arnold here to answer your questions on stocks, bonds, mutual funds. I used them to how you should position your investment dollars, including your IRA and four oh K. Don't hesitate to give us a call at nine five two five five six o eight. It's nine five two nine two five five six
o eight. Just in terms of positioning. Typically, our asset allocation model U does not focus on investing in bonds. Other people might might like bonds. They might might say that the sixty percent stock forty percent bond portfolio will provide a lot of safety and still give you a good return. May be true, But as interest rates have been moving up, bond prices have been coming down, yields up, prices down and it and unless the economy slows
significantly, I don't see bond prices falling much. Yes, you can get a very nice yield at shorter term bonds, that being you know, close to five percent, But I can look at a good number of stocks and get yields that might be a little bit below that, but still get a
significant return over a long period of time. So I've been I'll say I n we jud and I have been more stock oriented investors rather than bond oriented investors, and for safety rather than invest in bonds which will fluctuate in value. We happen to like playing old cash or money market investment where you can earn you know, at least some daily daily interest. So that's the positioning. We'll say, up to thirty percent in cash balance invested in stocks with
an aim towards grow. My focus has been in companies involved in the Internet, leisure related businesses, China related businesses without necessarily being in China and real assets such as real estate, and then taking a small portion and use that for very short term trading. Hey, we've got big event, as we've said with Apple coming up this week. Do have some earnings coming from Oracle, which might give a little more flavor to what's going on with artificial intelligence.
Salesforce has their dream Force conference, and again that's going to talk a little bit about artificial intelligence. Google has an anti trust trial on their search quote unquote search monopoly. Yeah, and you could see the start of a strike depending on the outcome of the United Auto Workers talks with Stillana's Ford in general general motors. There's another area that I avoid, that being investing in car companies. I do like cars, I avoid investing in car companies.
Probably the closest I've come to that is investing in uber or in a little company called co part, But I have shied away from the other other manufacturers of that Google anti trust trial, now, yeah, they have a commanding lead in search. Is it a monopoly, I don't know. I'm not I'm not so sure how it's a monopoly. But more people have been using Google's search business, which has I think in almost an eighty five percent market
share of search or even paid paid search. I guess that's because they've got a better mousetrap than Microsoft's bing or Yahoo or AOL or or other search services. To me, that's the We'll say. The consumers have spoken, and speaking of a suit, our favorite Amazon could also be facing a suit coming up either later this month or next from the Federal Trade Commission, going after Amazon for their domination in online retail sales and possibly how they deal with third
party sellers and their their prime business. Again, I don't think this holds a lot of water, But I do know that the FTC chairman has wrote a paper when she was in law school seven or eight years ago talking about Amazon's monopoly and how Jeff Bezos had utilized anti trust laws to build his business. Well, I'm not so sure that her arguments have had a lot of
rigor, or I'm not going to say hold a lot of water. I do know that Amazon's Yes, Amazon does have a good share of the online retail space terms of total retail Amazon is a smaller player compared to Walmart, Target, Costco and others, and all of those other companies also now are involved in online businesses Amazon's third party sellers. Well, yes, Amazon charges
for that service. If I'm a third party seller, I want to make things as easy as possible for people who buy from me using Amazon, which would include using Amazon to warehouse my product, ship my product, and then pay pay me to me. That makes it ease of use, more than more than anything else. As to Prime, hey, I am a Prime
member. I think it provides a lot of benefit, and I think I'm going to you know, I've always said the cost of Prime is I'll say the cost of Prime right now on one hundred and thirty nine dollars a year could be double and it's still be beneficial to me. So and lastly, should the FTC prevail, and one of the things they're looking for is for Amazon to be broken up. And if Amazon were to be broken up in three parts, their current retail business, their third party business, and their
Amazon Web services. Now that some of the parts is worth an excess of two hundred dollars a share, but volatility will continue. One last thing. It is very interesting though that Apple is down this week, but one of the larger holders of Apple, that being Virtshire Hathaway finished on the upside very interesting. Indeed, say this is Josh Arnold reminding you that anything that we have sold and set on this program is our opinions. Our opinions alone.
Investments do pose risk. Any Any of the companies that we have talked about may or may not be suitable for you, and please consult before you act. Please consult your financial advisor for more information about how we can help you. Give us a call nine to five two nine two five five six oh eight. You always get straight talk, not sugar coding device. 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. Consult your investment professional before making any decisions about your investment portfolio.