Noah Brooks (00:22)
Welcome back to another episode of the market enthusiast. I’m Noah Brooks. And obviously this is Chris needs. So here we are December 5th recording. We just got through Thanksgiving, black Friday, cyber Monday. Now they’re extending it. It’s not cyber Monday. It’s cyber week. Thank you is like black Friday the whole week too. If you’re talking about all the cyber deals I saw Amazon was starting out early.

Alexa was like, my gosh, you need to check out the cart. There’s so many great deals. And I took that as like, get on there and buy the stuff I put in the cart. So I just bought the whole cart and she was like, no, I didn’t mean that. I’m just like, my gosh. did that one year by the whole cart. wasn’t necessarily by accident. It was intentional. I wanted some, I don’t know, stocking stuffers and I, ⁓ there was a lot of stuff that Ailish had put in the cart and I just said, okay, buy all. And that was it. It was kind of a flub though. There was some,

some things, returns in there. Yeah, there were some returns in there that that was like two years ago. That’s what the lists are for. You’re not supposed to just leave it in the cart. Yeah. What, different lists are there? You can just save whatever lists you want. This is for Alexa’s, you know, Oh, I did not know that. only use the just, you know, saving cart list. Okay. Did you spend a lot of money for black Friday? Decent amount. I think more than last year. We didn’t buy anything. Oh, wow. Not a darn thing.

And we talked about it. We just didn’t feel compelled to go out and spend anything. Uh, we were looking at a new television. have a 55 inch in one of the rooms. We wanted to bring it up to a 65 or 75. I mean, you can spend $300 these days on a 65 inch television. But I’m like, why do I want to get a, I don’t know if it’s why don’t I just pay 700 for a 100 inch? Well, no, no, not that big. I want one of the, don’t know.

I want to make sure it has ⁓ all the good stuff, the OLEDs, not the mini LEDs. I was told they’re better. I don’t know why, but I was told they were better. ⁓ you know, shopping actually in stores, it’s still going up, right? Brick and mortar stores. think year over year in store brick and mortar sales are up a little over about a percent and a half online sales for Black Friday. This is not in general just for Black Friday.

And I think we have some stuff on Cyber Monday, up 10 and a half percent. But what’s interesting is traffic in the brick and mortar stores, people waltzing around there, that’s up significantly higher. we did a whole date day, we sent the kids off with the grandparents Saturday and we just did from like noon until 10, like we were out.

Oh, is that what you shopping? were just went to a restaurant and spent a couple hours there. that a little tipsy shopping? a little bit a little bit depends the game is on. So we stopped watch that. Nothing wrong with that. You know, I actually went to believe it or not, a mall. There was we were we were hanging out with some young kids and one of the boys was into football cards, trading cards. And we looked up online, there happened to be a trading card.

place in our mall. And we went in there, I had never been into a shop that was just trading cards before it’s kind of weird. So we walked around. And afterwards, I got a card. The young man says to me after he looks through these cards, a $10 pack of cards, he says, this one’s worth $400. He looked it up on eBay and apparently it was worth $400 a signed card. It’s like good for you, man. That’s the way to do it. So we wandered around the mall for a little bit.

It’s our local mall, obviously. And there was a Spencer’s and I was like, man, I haven’t been in a Spencer’s gifts. And you didn’t take the kids in, did you? I hadn’t been in one in about 35 years, maybe, maybe 30 years. And I was like, let’s go in. And when you go in the front and there’s all these, ⁓ outfits and costumes and you know, stupid, sweaters, Christmas sweaters and stuff like that. And we start walking to the back and I realized that in the back of the store, it’s a, let’s say,

adult variety of things off on the walls. And as soon as I realized that I was like, Okay, kids got to go have an 11 year old and a nine year old and I was like, ⁓ boy, that was ⁓ you did say you saw a cool Christmas sweater there though. Yeah, I saw the stepbrothers. Yeah, sweater. Yeah, boats and hoes. Right? That’s their famous song. So you didn’t contribute then you you weren’t doing cyber shopping, but you did go to a mall and contribute to some cyber did for the kids we did for

for cyber week, even though it wasn’t cyber. ⁓ I’m telling you that mall was sad. Yeah, it was. That’s our local mall. And geez, that was really bad. spent more money last time I was there at Berkshire. I spent more money at Gertrude and Hawk than anywhere else. Is that the candy store? Yeah, I bet you did. bet you That’s chocolate. You know, I just I can remember. ⁓ Shoot, I can remember in the early 2000s when Black Friday,

The stores around here actually opened after Thanksgiving. Like that night, they would do like a midnight show, not showing, but they would open at midnight for the door buster deals. And all the crazies showed up wild, ready to go. Yeah. Yeah. When I was ⁓ much younger working at Staples, we did that and we opened up at midnight one Thanksgiving day, one Thanksgiving evening. ⁓ But like no one really cares anymore.

Right? Well, you could just do it from your couch. Yeah, you can do it from your couch. You don’t need to go out. I don’t know of any store that had anything like you have to be here to buy this. You could buy everything online. I don’t know about a garden tractor or something like that, but yeah, it doesn’t didn’t didn’t really seem to make too much of a difference. But you know what did happen over that week of Thanksgiving market came rallying back. Yeah, we were having a rough month. Yeah, there was a rotation from growth.

which obviously makes up a large part of the major indices. If you’re talking about the SMP 500 and obviously NASDAQ and you know, for the month growth is still down. I think like 2.25 % approximately. ⁓ but value was up, you know, there was almost like a 4 % difference in returns and you know, it was, it was pretty tough. It was a quick little drawdown and

Thank goodness for Thanksgiving week because it turned around quick. think the NASDAQ was almost up 5%. S &P 500 was up like three over three and a half percent, I think. Good little recovery there. And, you know, it started off, we had a lot of hawks, know, Fed governors talking about no interest rate cuts for December, you know, they were just coming out in force. And then back half of the month, right around Thanksgiving.

We started hearing the doves come out cuts back on the table after a market sort of turned around a little bit. And ⁓ Kevin Hassett is floated as the prospective Fed chairman. And market seemed to like that because that’s easing right there. He’s always been on the easing case and he’ll kind of do what Trump wants him to do, we’ll say. And since then the markets turned around and has been performing pretty well. Yeah.

I put something out for all the advisors at the month end and essentially was large caps missed, took a month off, large caps took a month off because small caps were up, mid caps were up, international was up, value was up. But to your point, know, growth got hit pretty hard. S &P 500 was down from top to bottom. we topped out October 29th-ish, 28th and 29th were both kind of closed at the same

same levels on the S and P 500. Uh, and then the market fell about 5.1 % over that time period. And then we rallied back up, but large cap never like it came flat. It was basically up one 10th of a percent for, uh, for November. Uh, but everything else kind of led the way is, is that a sign of things to come? Are people getting a little bit antsy with large growth? I mean today metas on fire because of their cutting some, uh,

⁓ metaverse spending, I think by 30%. So, you know, they, they rallied dramatically, but I feel like there’s more of a, a ⁓ sell the rip attitude these days than, ⁓ than necessarily by the dip. mean, that hasn’t played out dramatically. We’re not down 10%. I mean, we are a half a percent away from all time highs as we sit here today. Yeah. So that’s how I’m looking at it is we’re that close to all time highs. I think this was just a short term.

speed bump looking at valuations, which we’re certain to get when we’re at high valuations. But, you know, people have been talking about bubble, we’ve said that we’re not in a bubble. And how could you be bearish when you’re half a percent from an all time high, and you just had this sell off that created some panic. And it was just a rotation. It’s not like people sold out and went to cash and we’re running for their caves, you know.

They just went from growth to value. Yeah, that’s that’s not a crash. That’s not a bubble. If it’s a bubble, you’re going from growth into cash or growth into treasuries. This was just a rotation. In my opinion, this happens all the time. We’re just a little besides I know we had a lot of volatility earlier in the year. But last few years, we haven’t been used to much volatility. We have not. We’re spoiled. I mean, we did have a 20 % drawdown this year. Not so much in 2000.

24, I think the biggest drawdown was like 9%. We know that number. Obviously 23, nothing crazy. In 22, we had a massive drawdown, 30 % on the NASDAQ, 20%, 25 % on the S &P 500. Everything is rosy now, but I guess my sense is that, you know, the confidence that we’ve had that artificial intelligence is going to come in, save the day, create all these earnings and make everybody more productive.

all of that may be true. And I suspect it is true. But people are still more inclined to sell today than they were six months ago. Another piece that I think played into sort of the early November rotation and ⁓ escape from growth, we’ll say, was the Fed governors who were hawkish at the start of month that I mentioned

they’re admittedly and they truly are it’s a valid concern flying blind in terms of data right now they’re going to do next week they’re going to have this meeting and they don’t have any information to go on i i joke to you we have new old information like we’re getting some data from september like that’s great but yeah it doesn’t really do anything for me so we’re we missed ⁓ we missed october fully on the jobs report if i’m not mistaken we’re gonna get a november jobs report it’s

going to be a week and a half late. Normally it would be out on the first Friday of the month, which is tomorrow. ⁓ we’re not going to get that jobs report to the 16th. Do you think that the people at the fed, the governors, the voters are going to get to see that data before the meeting next week? Do they have the data? Yeah. So they’re not going to fly by. They’re, they’re going to be less blind than us, but

You know, it’s probably a scenario where they have all this data compiled and you know, maybe it’s 90 % done. They know it looks like this. It’s probably gonna come out to some threshold of plus, you know, some level or another. ⁓ I don’t think they’re just like closing their eyes and pretending they don’t have any access to the data. Yeah, that’s kind of what I meant is like they may not get the full report. They don’t have the finalized numbers, but they have the progress up to that point. Yeah.

And so, and we don’t have any of that stuff right at the moment, but there was other data that came out. The ADP number came out this week, which showed a decline of about 32,000 jobs. And then the challenger gray and Christmas, which quite frankly is something that we don’t normally look at. It’s not a high priority report. ⁓ It shows layoffs of about 71,000. And normally we wouldn’t even bring it up.

But because there’s the absence of other data, there’s nothing else to talk about. So I guess it gets talked about. Those numbers are not great. Yeah. You know, the negative, ⁓ ADP number, ⁓ a pretty large layoff, ⁓ from that challenger report. And I think they said the total for 2025 is going to be, ⁓ well over 1.1 million, ⁓ layoffs. And the one thing that came out about the ADP report.

which is a little bit disheartening is that the majority of the decline was in small businesses, businesses under 50, 50 employees. That to me is a sign of, let’s say underlying economic weakness. Now it can certainly turn around, right? I mean, one month doesn’t make a year, but if you’re watching that, I would be, even if we get regular, we will get regular data next month.

But I would be inclined to look at those small jobs, small employers and what they’re doing. So obviously the big companies out there, they do it in mass. In one company’s ⁓ idiosyncratic situation, their own situation doesn’t necessarily bleed over to anybody else. But when you see small businesses, let’s say across the board shedding jobs, I don’t know, that could be.

Yeah, we were one one hundredth of a percent from ⁓ being able to round up to four and a half percent on unemployment. So it was four point four four percent. So layoffs picking up a little bit as you’re just getting out with the Challenger report ⁓ on employment, taking up ⁓ definitely a softening labor environment for sure. And, know,

We haven’t seen inflation tick up a ton. It has ticked upwards, but not to a concerning extent. So here we are once again, having the debate of what’s the Fed going to do with their, you know, two mandates sort of contradicting each other. if they lower in December, or if they stand pat and don’t do anything, it’s not that big a deal. But everybody’s hung up on it.

I mean, if they were going to lower 50 basis points or something like that or more, that would be a big deal. I guess it’s, you know, it’s a prelude to what they’re going to do next year and maybe how all of these people on this, this board of governors are going to work together. And we’ve seen the most, ⁓ contradictory, ⁓ not data, but opinions that I think that we’ve ever seen, at least since the seventies between those voting boards.

board members, where you have a block that are like, we’ll see what the data is, you have a block to say, no, we want to lower now. And you say you have a block to say, no, we’re not going to lower. had unanimous decisions for the longest time under pal. And yeah, that has just gone right out the window. And now there’s tons of dissents. And he’s basically fanning it. He’s just saying, go ahead, have your own opinion, go out there and speak. I’m not going to quiet you down. He’s just letting it say get out of control. He’s letting them speak. He’s got five months left. Yeah.

picture. the other thing we have to deal with is everybody knows he’s out and and has is likely the one who’s going to step in. But not only that is we have new Fed governors who get to vote next year. So it’s not just up to Kevin Hassett. ⁓ Obviously, they vote on it. And it seems like most of the Fed governors are hawkish who are going to be coming on and replacing. So voting members

I think are going to signal in the dot plot a little bit more hawkishness to say basically we’re not just going to uniformly cut rates because Kevin Hassett comes in and because Trump wants it that way. Well, that’s one thing I would be careful about when we see coming in with they don’t want to look like they’re just going to get steamrolled by the administration. Right? No, nobody wants to look like that. Even if that’s the case, they don’t want to ⁓ telegraph that out there. At the same time. They are data dependent.

But there’s no labor is weakening and labor is weakening. I think they should be lowering. as you just said, inflation is actually ticking up. But not it is. Yes. not as much as not as much as they are forecasting each month. It’s a tenth below, tenth below. It is ticking up, but it’s always below their expectations. So here’s the thing that not that I see coming down the tracks, but that that maybe is a concern for me. We haven’t really had any, ⁓

blow ups on anything. Right? We haven’t had any big bank blow ups. I mean, we had a little bit of that in 2024. With a yen carry trade kind of went awry and we had some Silicon Valley bank back in 23. Yep. Yeah, that’s exactly right. But right now, we’ve had, you know, we had a tariff situation earlier in the year. That seems to have blown through prices look like they’re rising due to tariffs.

and not dramatically, but they look like they’re elevated due to tariffs. We had some trade numbers that kind of show that the pre-buying of supplies pre-tariff, that’s all but done now. they’re not because tariff revenue picked up pre drastically in October. Yeah. Yeah. Which I think is great that that’s happening. But at some point,

all of the businesses that are paying those tariffs are going to be passing them on and they’ve been absorbing them to some degree. They’ve been finding ways around them. I mean, it’s one of those things where you can’t continue to not pass it on to the consumer at some point. I’m, don’t know if this is your, then we saw the purchasing managers index was actually kind of cool. That was kind of interesting to see despite we were all, we already knew about the, the tariff revenue picking up, assuming they had to buy the tariffs. So that was some

Surprising information. I remember talking about that. Yeah, let’s just hope that there’s not some type of crisis Yeah, right because we still have a Federal Reserve that is holding on to six trillion dollars of our own debt We have I mean the the only saving grace in a crisis would be that we can lower rates, right? It’s it’s not at zero now. It’s not at 1 % It’s not at 2 % You know 375 to 4 if I’m not mistaken at the moment. So we have something to work with in that case

But some type of economic blow up would be pretty bad right at this point in time, especially for confidence. know, confidence can be fleeting and it seems like it’s kind of neutral at the moment. The consumer confidence came in. It continues to tick down. That is something that came out. Although I think it was for October, not November, because they didn’t have that yet. ⁓ Confidence Board index for November.

dropped six points to 88.7 lowest reading in seven months. You know, so I think that’s consumer confidence, people like you and I. But from a standpoint of the CFO world, you have to really question if you’re a CFO of a midsize or even a small company, you have to really be on your guard. You know, you can’t be doing a lot of extra spending. And as a matter of fact, just like Meta announced, right,

a 30 % decline in spending on the metaverse, which gets rewarded in the stock market. Absolutely. You know, and so everybody’s thinking the same thing. Where can we save money? And if we use AI, we could save some money, right? Get some lower level employees. Just use the, use the AI bot. Oh man, that’s rough. That’s that really is rough. Turning to something more fun. So a few weeks ago we were talking about the election, right?

and specifically the New York mayor, the ⁓ self proclaimed democratic socialists, mandami, right? Well, wouldn’t you know it, mandami went to the White House. look nice and friendly in the in the Oval Office too. What do you think about that? Very interesting. Yeah, I don’t know. I would would like to be a fly on the wall to hear the conversation before the press got in there. Because when the press got in there, they seem very friendly. Cordial.

They seem like they were best buds. Very strange. I mean, Trump wound up, wound up coming out and saying that they both have the same goals for New York, you know, and they both want to make it a better place. And he said that Trump said that ⁓ even some of his party members of his Republican party would be surprised by mandami. I was like, okay, that’s definitely not what I was expecting to happen.

Now, how do you think that happens? It goes from, ⁓ you know, your arch nemesis, if you will, he was saying Trump was saying that they were going to, ⁓ kick him out of the country. How do you go from that to holding a presser with a guy saying, you know, this, this guy’s good for New York. What changed? think in an initial meeting, they purely focused on what they had in common. Their common goals, which is probably

lowering prices, creating better living circumstances. And despite the total opposite ways they would go about it, they just focused on their shared goals. You know, politics, you go right enough in a circle, you come back the left a little horseshoe theory, right? You come back to the center a little bit. I don’t know. I’m good with horseshoe theory. Well, I’m not good with it. I recognize it sometimes. Yeah, the extremists on both sides wound up

coming back to one another and saying the same thing. Yeah, that’s a little bit weird. Definitely a little bit weird. So over the last two weeks since we were here last time, we had a data center that kind of overheated and blew up and the CME was shut down for like 10 hours or something and not every part of the CME but a big portion of their trading was shut down. I keep waiting for it to happen everywhere.

Just send a blow up the grid on accident. I’m not a fatalist or anything. I just think as we become more and more dependent on these big server farms and obviously the utility grid, and I’ve been watching some weird nets Netflix stuff. Like, think we got to use the AI we have now to create more power efficient chips. And then these gigantic data centers we have that are using exponential amounts of energy will hopefully become more efficient.

through products, like they can potentially find different vaccines and cures for diseases and stuff using AI. Let’s just design a better, more efficient chip. And ⁓ I’m with you and we’re good. I think the main concern though is I start talking to clients and investors and the main concern is if artificial intelligence is going to relieve me of my duties in this job.

and not me, but you know, just in general, ⁓ where are all these people going to go? What are they going to be doing? Is it going to be a UBI? And then we talked about this, you know, on and off occasionally, but like, this is the real question that I’m starting to hear from investors. If everybody is relieved of their jobs, not everybody, but I mean, there’s 160 million ish, 159 and a half million people employed, ⁓ as of the last data.

If you were decreased that by 10 % because you don’t need those people. I mean, that’s 16 million people. Yeah. What are you going to do with those people? 50 a hundred years work will be leisure. It’s so backwards. You’re going to have the master woodworker who is going to want to do his craft. It’s art to him. We would probably be doing the same thing we’re doing now. We’d still be trading against all the machines just because it’s fun. And we like to study. I know I’m not doing any carbon trade.

I’m not going to become a master woodworker. I mean, so did you see Sam Altman and your chat GPT, ⁓ declared a code red because he’s getting freaked out about how well Google’s Gemini three is performing. Yeah. So he pulled all the open AI workers off of other projects, told them, get back in on the main money driver. We need a more efficient, more powerful algorithm that is more aesthetically pleasing with quicker answers.

⁓ before they take over and we lose our first mover advantage. Well, they definitely had a first mover advantage, right? They came out in 2022 and we didn’t have any other large language models at the time. And that really set off the Nvidia trade. set off all of the semis again, ⁓ and anything, you know, around artificial intelligence went through the roof from the release of open AI or chat GPT all the way up till we call it today right now. ⁓

I mean, it’s like a beta versus VHS dating myself when I say that. But I mean, once you get involved with one of them, and you know how it works, and they understand you, and we’ve spent this time crafting it, are you going to move to another one? I might try Gemini. I’m a chat GPT guy. I use it. have three. I don’t use them, but I still have tried out several of them. I have I think three on my phone apps. So, you know, it’s definitely worth trying a bunch of them.

Apparently open AI is like this close to rolling out ads. Like they have it built out and everything. And that’s one of the things they pull wait on their, on their free version. Yeah, I’m not paying for it. And gonna see an ad you did for cable cable television. You paid for that and you got ads every 15 minutes. Hey, I’ll tell you what the ads, it must be AI because the ads are getting a lot better. Like I said to you, like we’re doing research, I had something up. I was reading some article about

fast casual ⁓ chains and their market caps and what have you because I was doing some stuff and boom, CFA Institute frames pops up. I’m just like, my gosh, they’re getting good. And then like I go to Yahoo Finance and what do I see banner across the top Arby’s I’m like, my gosh, I speak into my soul. Arby’s just got well, it’s a seasonal item, but they just got rid of ⁓ the deep fried turkey gobbler. Is that right? I don’t know if I talked about that on the pod yet or not. But it’s just a guilty pleasure.

It’s not amazing, but it’s still good. It’s a good little guilty pleasure. Interesting that you bring that up. I’m not a fan of the deep fried gobbler, but as a kid, I was a fan. I say young, young guy. I was a fan of frozen burritos. Well, it turns out the guy who invented the frozen burrito just died. Do you know who that is? I do not. Yeah, I had never heard that man. I had never heard of him either. Dawn Roberts.

88. He started a frozen burrito company in the late 50s. Legends legend, right? Is that something that people still eat? I don’t I don’t go for frozen burritos anymore. I’m tempted not to go for any breeders. went to Chipotle today and I don’t know man. Something’s something’s falling off there. Not only their stock price, which is getting crushed right now, but they’re behind the eight ball. Everything was out. They called for one thing. Need more brown rice.

stand there waiting for brown rice. Guy brings it out two minutes later, there was on Oh, we’re low on chicken. Oh my gosh. And all while you were just there. It’s like 15 minutes. Do think that it is an affordability issue? I mean, notwithstanding your you know, lack of brown rice or whatever. But like, in general, do you think that these fast casual places are running into the same issues? I think people like go to eat on them for a while and

customer taste change. Like I’m a very addictive personality where I will go to like Chick-fil-A like every other day for like six months and then I won’t touch it for two years. I’ll try Chipotle once a week for three months and I won’t go there for another year. I think there’s people experiencing that and then on the business operations side, yeah, you have tariffs. They need avocados from Mexico. They need, you know, all these things that are more expensive now or, you know, getting held up maybe slowed down in their, their supply tend to think

that the affordability situation is that, ⁓ to your point, all of that stuff is accurate, but I think businesses raise prices because they thought they could. And in fact they did and they could. And I think the, the COVID hangover is coming to an end. And what I mean by that is I think that we were in this situation and not everybody, I can only speak for myself, but I think we’re in this situation where you kind of like,

man, I just went through all this and I know it’s 2025 and COVID was 2020, but I think we’re still, or we have still been at this point where like, well, screw it. I’m going to go to Applebee’s. I’m not an Applebee’s guy, but there’s a lot of people that love Applebee’s and those fast casual places and the Chipoltes of the world, in the Jersey mics of the world and all of that stuff.

Jersey Mike’s is so expensive. mean, the stuff’s good, right? Stinking sub is like $16. A tuna, right? And I think there’s this people are going to be pulling back a little bit and going, you know what, I even know I should treat myself because that’s the way they were after COVID. Like, no, I’m not gonna do it. I’m gonna go home and make, I don’t know, frozen frozen pizza.

Yeah, right. You can still buy a frozen pizza for like five bucks. am totally feeling that. And I’m definitely doing that personally. And with kids. It’s so dang expensive. Anytime I go anywhere. It’s like $38 for McDonald’s. I’m like, what did we order? Yeah, what happened? just had a pretty strange experience. I we were watching some kids, same kids that I took dispenser gifts. And we went down to King of Prussia. And we went to the Netflix experience, which is a little bit strange.

I wouldn’t have done it if we didn’t have kids with us. But it’s like a an escape room. There was a Wednesday, you know, the show Wednesday, there was one of those and then there was another one that wasn’t, I guess it was on a show based on a show, a show that I had never heard of. But there was live actors in there. So the tickets for four of us

were $235 including nine holes of mini golf in indoor mini golf. Some snacks at the restaurant were 75 bucks. So we’re over $300 for a two hour event. think, I think you should be allowed to expense this. Yeah. Well that’s probably not going to happen. But the fact of the matter is, is that they’re going to do that until they can get away with it. And there were a lot of people there.

I’m not so convinced that that type of spending is going to continue. And maybe I mean, we saw some news from maybe it shouldn’t. ⁓ And maybe it shouldn’t. We saw some news this week for was a Dollar Tree that they were starting to pick up a little bit because people are coming down, right from from going to the grocery store to going to the I don’t if you want to call Dollar Tree like a lower end store. ⁓ More economical.

But I mean, that’s that’s a tell. Walmart’s been killing it. It’s not because people on the low end of the income spectrum are spending more. It’s because people on the high end of the income spectrum Walmart is like right there with Nvidia on price earnings. Like that’s insane to me. That is a little bit rough. But you know, maybe the affordability crisis is going to fix itself because people just won’t be able to be paid. Pay for they won’t be willing to pay. I said that last podcast with the San Francisco’s report.

the the Fed, San Francisco Fed of how tariffs are deflationary, because they destroy demands. Yeah, well, that’s not what all pans out. Yeah, it all checks out, though. It’s exactly what you’re saying, though. I don’t know, something’s got to give. ⁓ To your point, what you said, Mickey D’s, I had a number one the other day, it was like two months ago. And it was like $14. That’s not that’s crazy time. I do like burgers. We’re at Five Guys.

their double cheeseburger is like 12 bucks. They also charge way too much for the sodas. We’re complaining a lot. But yeah, you know what a lot of it’s valid too. Is it? I mean, yeah, it’s just for me and Alexa. It’s over $30 at five guys. I’m done with it. Done with the fast casual. I doubt it though. Yeah, me too. Moving on. So I had some data that came out. Tokyo used to be the Tokyo metropolitan area used to be the largest

⁓ city area in the world. has ⁓ been surpassed by do you know where? Somewhere in China? No? Indonesia. Jakarta. ⁓ 42 million residents now. boy. And reports stated that half of, so we’re over 8 billion people in the United States. Half of those people are all city bound. What’s

So do they have the highest density, assume then population density? I would imagine. But so Jakarta and Indonesia, if I’m not mistaken, is 260 islands. Jakarta is not, ⁓ you know, broken up like that. Seoul, think, was pretty big back in the day. I mean, it’s still big. 32 million people in the metropolitan area. We do not have as Americans, we do not have cities like that. No. ⁓ Greater New York City, I think, is 15 to 16, depending on what you’re counting.

⁓ China has 50 cities over 10 million people. It’s nutty, right? Why do think that is that there’s so much? I mean, I know China how populous they are. But is it the fact that maybe those areas while up and coming and business centers, opportunity centers for those countries, the people still don’t have enough money for transportation, like they don’t have their own cars, so they have to live.

within a certain distance where they have to take some sort of public transportation? I’ll submit it’s jobs. There’s jobs in cities. You can get a job. I mean, you don’t need a lot of training to be a doorman or a Uber driver or, you know, we’ll call it a landscape architector. Right? I mean, there’s jobs in cities. That’s why people go there. That’s why people went to New York City and Philadelphia 100, 200 years ago. You know, so

Until that changes and obviously that’s not going to change until that changes. People are going to look for jobs in the city if they’re if they’re out in the country. It does seem a little bit strange because now we’re starting to hear a little bit about Taiwan again. And obviously there’s some ruffled feathers between Japan and China and we sort of went in there to talk to both of them and try and calm everything down. I’m trying to prep people.

for what happens when not if but what happens when China goes into Taiwan. I am convinced 100 % that it’s not an if it’s a when and and so you see she out there talking to President Trump and him kind of saying like he talks about Taiwan the same way Putin talks about Ukraine like that was ours that is ours. Yeah, now

I think we’ve talked about this before. I don’t think we’re going to do anything to stop them. I don’t think we can do anything to stop them. But my concern isn’t about that. My concern is about the market when that happens. Yeah. Right. So I don’t, you know, to sit here and to speculate, oh, the market’s going to go down 5%, 10%. I don’t know if anything’s going to change. I just want people to be ready for it when it happens and kind of take it as it comes. Something’s going to happen. It’s not going to be.

the same way with Russia going into Ukraine. ⁓ They might, they’re not going to be welcomed in Taiwan, but they’ve, ⁓ they’ve been putting their own people on most of the political ⁓ elected officials. You know, they’ve been installing their own people slowly, but surely over the years. And so they may be able to little coup, quiet coup, quiet coup. They may be able to go into Taiwan, take over, you know, one China policy without

firing a single shot, it’s possible the market goes up. They still haven’t won the presidency with the one China person though. But once they do then that’s what if what if they just get rid of the presidency? Right? Yeah, course. Well, if there’s an assassination and someone just gets installed, hey, TSMC like two days after we talked about on the podcast, like one or two months ago, opened up their Arizona plant finally. So what’s the their diversities days?

I don’t know that yet. They just opened up the door for the first time. it and started production. So I don’t know if that’s 25 % capacity or if that’s a hundred, like if they built it out completely right off the bat. So to us or to the market besides Taiwan semi, what does the stock market care about Taiwan?

I think it’s not only obviously TSMC would, it would stink to have their headquarters and their plants taken over. That’s the most important thing that would affect our markets. But then additionally, it shows China’s aspirations are no longer inward focused and are now expanding geographically, which is not good because we’re going to have buttheads. mean, I think

You know, the, the current administration has purged most of the China Hawks, right? And a lot of the America first contingent, not a lot of anybody in the America first contingent is inward looking. We’re kind of doing the exact opposite of what China is doing by looking outward. We’re looking inward. The China Hawks have been purged. Most of them and

I this is why I say when China goes in there that we’re not going to do anything. We’re going to let them go in. And and that’s going to be that I quite frankly I don’t even know if the stock market will blink. It could. I mean it depends on how it how it plays out. I just don’t want anybody to get freaked out when it happens because it is going to happen. I you know why I think I think it’s going to be well communicated. I think she’s going to tell President Trump.

behind the scenes, we’re doing this, and we’re going to do it then and you’re not going to stop us because we’ll go to all out war. This is not your territory. This is one China. We’re going to do it here so you can prepare your country however you see fit, but we’re doing this. Yeah, and we’ll just let it bleed into the press. So it’s not a surprise. And that’s the best case scenario. That doesn’t rule the markets where we sort of communicate like, in one month, they’re going to do it. Intelligence reports say this and

And we just position publicly that, all right, we’re going to sanction them and do this or that, but not militarily have a conflict. I could absolutely see that happening. No question about it. I just think it’s going to happen. Yeah. One way or the other. For sure.

All right, as we’re writing down here, what else do you have for us today, Chris? Just a couple things here. So I thought it was very notable, very cool. Michael Dell announced a huge donation here towards the Trump accounts. course, Trump Trump put into the tax legislation a bit for non we’ll call it non wealthy. I forget off top my head what the dollar amount is. But kids will get $1,000 in an account.

that will grow until they turn 18, which I think we can all agree is a pretty good idea for non wealthy kids who don’t have maybe parental support. They’ll come out with something when they turn 18 and may be forced to go out on their own. So yeah, children born in 2025 through 2028 will have access to this and then Trump, you know, not being able to help himself the form that you need to file in order to open up the Trump account for your child. If you’re having a child in 2025 here,

is or 2026 is going to be form 4547. But really cool that Michael Dell did that $6.3 billion for the kids. What’s his angle other than charitable giving? When he’s following in some multi billionaire like just let him give the money away and just be happy. I think he’s ingratiating himself I’m sure but additionally, additionally, it doesn’t matter for the kids.

No, it’s definitely for the kids. I mean, maybe he’s trying to take a page out of, you know, the Buffett playbook, or maybe he’ll run for office. Michael Dell. Yeah, maybe. Yeah, I don’t know anything about Michael Dell, except he sold me my first computer back in the day. Lots of laptops and lots of laptop. Yeah, still using still using those laptops today. Other than that, I think just it looks like that rotation we saw in early November.

think it’s ended. We’ve seen over the last couple years several situations where small caps rallied really hard and like, wow, it’s finally here. You know, they’re back, or we’ve seen a huge rotation of value over the last couple years. And you know, it’s real hard, real fast for a couple weeks, maybe a month. And then it just sort of fades away and everything goes right back to growth and momentum. I think we’re starting to see that again, we’re at a seasonally strong time of the year, December, obviously, everybody knows the Santa Claus rally.

which doesn’t start until after Christmas, but December itself is very strong. So I think we’re going to see a little rotation here back to maybe some momentum stuff. Okay. I don’t mind. I mean, it doesn’t matter what I, what I feel about it or what I think about it. I just think there’s a point where the productivity gains that we’ve been talking about through artificial intelligence actually filtered down and we’re not just looking at growth from capex spending in the AI companies, but

it’s actually coming to fruition that they’re the businesses that have been investing in artificial intelligence are actually starting to reap the rewards from a profitability standpoint. And that helps the value companies. Definitely. Yeah. Yeah. All right. For everybody a good life. We appreciate you listening. Thank you so much. ⁓ don’t bet against America. Don’t stop your compounding and don’t do anything emotional in the stock market. See you next time.