With major indexes near record levels, investors are seeing returns come from different places than in recent years. At the same time, policy headlines and infrastructure challenges are playing a growing role in how markets respond to earnings, growth expectations, and future investment trends.
This episode connects what’s happening in markets with the real-world constraints that could shape economic growth in the years ahead.
While the S&P 500 remains close to all-time highs, performance so far in 2026 has been driven less by mega-cap technology stocks and more by small caps, value stocks, and international markets, including strong early gains in emerging markets.
Rather than signaling market stress, this shift reflects a broadening of participation as investors reassess valuations and look for opportunities beyond the largest names in the market.
Rotation like this often occurs when markets transition between cycles, and it can create a healthier foundation for longer-term growth if earnings begin to follow capital flows.
Noah and Chris also discuss the Federal Reserve’s recent decision to hold interest rates steady and how expectations for future rate cuts have started to fade.
With valuations still elevated, markets remain sensitive to changes in the cost of money. When rate-cut expectations shift, multiples can adjust even if corporate earnings remain strong.
The episode highlights why forward guidance and economic expectations may matter more than backward-looking data as investors reassess how long higher interest rates may remain in place.
While artificial intelligence continues to drive corporate investment, the conversation turns to an often-overlooked constraint: electricity.
Data centers, automation, and cloud infrastructure all require massive and reliable power supplies. As demand accelerates, energy production and grid capacity are becoming critical factors in how fast AI can realistically scale.
Noah and Chris discuss renewed interest in nuclear, geothermal, and other energy sources, and why future technological growth may depend as much on infrastructure investment as on software innovation.
Beyond interest rates, the episode also touches on shifting policy signals around tariffs, healthcare spending, and regulatory changes, all of which add layers of uncertainty for businesses making long-term investment decisions.
When rules and costs are less predictable, companies may delay expansion, adjust hiring plans, or rethink capital spending, even in otherwise strong economic environments.
This uncertainty can contribute to market volatility even when headline economic data appears stable.
The discussion also explores how automation and AI could influence future employment, productivity, and wage growth, especially as demographic trends and immigration patterns evolve.
Rather than eliminating work entirely, productivity gains may shift where jobs are created and how businesses allocate resources, potentially reshaping labor markets over time.
Understanding these long-term trends helps explain why economic growth can continue even when hiring slows or job categories change.
As markets navigate innovation, policy shifts, and changing leadership, the episode reinforces several core principles:
Strong markets are built on more than momentum alone. Sustainable growth depends on capital discipline, reliable infrastructure, and stable economic conditions that allow both businesses and households to plan with confidence.
Market Leadership Changes: Different areas of the market take turns leading returns.
Power Matters for Growth: AI expansion depends on reliable energy infrastructure.
Rates Still Influence Valuations: Expectations can shift quickly with Fed policy.
Policy Creates Uncertainty: Tariffs and regulation affect long-term planning.
Discipline Still Wins: Diversification and patience remain critical.
Hey, welcome back to the market enthusiast. I’m Noah Brooks and obviously Chris needs with me today.
speaker-1 (00:00)
Hello. So what’s going on with your eye over here? ⁓
speaker-0 (00:05)
Hello.
Well, Fight Club, wait, not supposed to talk about Fight Club, so basketball. Okay. Probably can’t even tell. We’re probably like mid HD, not quite high HD.
speaker-1 (00:14)
⁓ okay.
I can tell. I mean, you’re gonna have a black eye tomorrow.
speaker-0 (00:23)
little bump head to head. I have a hard head. It’s all good. He had a little cut. He was bleeding, but all good. ⁓ Yeah. Well,
speaker-1 (00:28)
other guy look
I hope you don’t have a black eye tomorrow. No seriously. Uh, welcome back to the market enthusiasts. We are at the end of January, 2026. I cannot believe it’s 2026 in my head. I still think it’s 1997. That was a great year, right? It was a great year. It was a good year. It was a good year for lots of different reasons. Um, including the economy, right? The, the late nineties were outstanding. Everybody remember remembers them as a
speaker-0 (00:46)
I was flying.
I mean.
speaker-1 (01:03)
one of the time periods, one of the few time periods in history, certainly recent history that we’ve had a ⁓ no deficit in the budget. mean we didn’t have any debt, but we didn’t have a budget deficit ⁓ in the beginning of the 2000s until the dot com crash. How does that compare to today, Chris?
speaker-0 (01:25)
We’ll be at 40 trillion in no time probably by the end of the year, I would guess. Yeah. don’t know where the ticker is at right now, but it’s moving up fast. Hey, had us debt clock ever go to that. That’s trippy.
speaker-1 (01:36)
It’s
just spinning. Yeah. Yeah, all the time. But here we are. End of January S &P 500 up.
speaker-0 (01:39)
to control.
7,000 today briefly hanging out around there. Yeah.
speaker-1 (01:51)
⁓ S &P up just a little bit for the year. ⁓ Value up over 4%. Growth is really flat for the year. Almost nothing. S &P up just shy of two when we came in to record. ⁓
speaker-0 (02:05)
Russell 1K growth is down like 0.3%. Yeah.
speaker-1 (02:09)
Yeah,
growth the mag seven not necessarily working so well this year. Big winner though, international, right developed international
speaker-0 (02:17)
Latin
America, Latin America up 17 % here today. Yeah. Yeah. We should have moved into that. Huh? We’ve been talking about that for years now. Nearshoring. That was our reasoning behind talking, talking about it, but
speaker-1 (02:30)
it it didn’t play out. It didn’t play out. But emerging markets. I mean, we have healthy allocation emerging markets. And, you know, that’s they’re up 11 % for the year. Yes, ripping and roaring. And small caps and mid caps up ⁓ over 5 % on both accounts. You know, so there’s there’s a lot of rotation. Now we’ve been talking about rotation for a long time. And I’m not sure that this is going to stick. But it certainly is working in the first month of January.
Yeah, there’s no question about it. And we’ve had a fair amount of economic ⁓ data coming in. today, ⁓ earlier today, the Federal Reserve met ⁓ and they did nothing.
speaker-0 (03:13)
Yep.
And Mirren only wanted 25 basis points. That’s shocking. Yeah, that’s shocking. And we also had Waller who also went 25. So two descents.
speaker-1 (03:24)
Yeah,
but so out of 12 we had two people dissenting. It doesn’t seem like we’re going to get cuts in the short term. We’ve had three cuts so far and you really what they’re they’re cutting or not cutting is the cost of money, right? You know, and so the question becomes it was there to dovish an expectation for a lot of cuts in 2026 and then those expectations are kind of fading.
And what’s that due to the market for the end of the year?
speaker-0 (03:55)
I think to as of like a week or two ago, know, Fed futures were pricing in 1.825 basis point cuts. ⁓ You know, my fear for the market is that we don’t get any. And like you said, we, you know, you have the multiples that are expecting a certain price of money, certain interest rate. And if we don’t get that, that could be one risk to the story to this, you know, bull market we’re in obviously. ⁓
big earnings week that we’re in the midst of that’ll certainly have a lot to do with if we keep this momentum going. I know you said the S and P 500 isn’t up much to about 2 % 2 % year date. That’s not a bad month at all actually, but uh, you know, it just seems a little slower in comparison when we’re looking at what smalls and mids are doing and international is doing. Um, but yeah, we have four of the mag seven reporting this week. That’s a massive amount of
speaker-1 (04:34)
Yeah, a little.
speaker-0 (04:51)
market capitalization. So Tesla and Meta are actually reporting today after the bell. So we don’t know those results yet, but you probably know when this comes out.
speaker-1 (05:00)
I mean, I’m sure they’re gonna be good. It’s just a question of how good and then what are they gonna say at the end? Yeah, right. mean, they they
speaker-0 (05:07)
don’t
know if Tesla’s will be, we’re not in the prediction markets here, but I mean, it’s all it is, is about what Elon says. If he says they’re going to roll out autonomous driving into 10 more cities by year end, stock will probably love it. Or if he says optimists will be out in Q1 27, the market will probably love it, even if they don’t sell any cars.
speaker-1 (05:27)
So let’s talk about this FSD for a second. ⁓ You know, we are not the leader even though Tesla has been around for a long time with with self-driving cars. The United States and Tesla is are not the leaders in self-driving cars for that. have to look to China, right?
speaker-0 (05:46)
Waymo
Waymo is they utilize all the technologies but they’re not on a on the scale of the Chinese
speaker-1 (05:52)
So
in in China, they have many more cars had that have driven many more miles ⁓ of autonomous taxis, robocars, however you want to describe it. And they have a lot more data to collect on it. So you have the big companies, Gili and BYD over there. Over here, you know, we have obviously Tesla is the big one and you have Waymo ⁓ Waymo is using ⁓ radar and LIDAR.
Tesla’s simply just using cameras. Yeah, right. So you have it. I know you use it occasionally. What about we had this conversation a few weeks ago? What about like fog and rain? Can it see through that?
speaker-0 (06:36)
In my ex, so I don’t use it often as you know, I only use it very infrequently, but you get a lot of error messages that like one of the cameras is blocked when it’s like raining or super foggy with certain your left pillar camera is blocked, something like that. So there is issues. Now I’ve used the assisted like auto steer, which isn’t the full FSD in the rain and there’s never been an issue even when it says that.
⁓ but yeah, I don’t utilize it enough to really know what would happen.
speaker-1 (07:12)
I mean, if I had a choice though, I would want all the tech, not just the camera tech.
speaker-0 (07:17)
Right.
It’s a price thing. think. I mean, well, Tesla’s are very affordable vehicles relatively, you know, when you’re looking at comparison, Waymo’s setups are pretty expensive. Yeah.
speaker-1 (07:29)
But you can buy a Tesla. can’t buy Waymo. And they go around with all that stuff on their roofs. It’s not like, yeah, it’s not something we really want to drive. But I mean, it’s interesting stuff. I would tend to think that the laws are going to need to catch up to the technology before they can really have a rollout across the country. Even even more cities. I think they they have to really do something with the the ⁓
speaker-0 (07:32)
Right? Yeah.
Yeah.
speaker-1 (07:58)
the legality of it. We talked about this a weeks ago, there was a lady who had a baby in the back of a Waymo and Austin, I think it was. And they finally, you know, they, they sensed the stress, they got someone to driver someone remotely to driver. I think she did deliver in in the car, though. Yeah, I mean, there’s there’s some things that need to happen. But I’m ready to take one of those rides. I’m ready to hop in a way.
speaker-0 (08:22)
Yeah, it’s
not as scary as you think.
speaker-1 (08:25)
Do think they’re gonna you think Tesla is gonna roll out a bunch of cities? You said that
speaker-0 (08:29)
What are the, think they’re only in like two or three right now. ⁓ Yeah, I’m sure Elon will say they’re going to, even if they don’t, I’m sure he’s going to say they are. And, know, for, stock appreciation purposes.
speaker-1 (08:43)
They have not been all that strong.
speaker-0 (08:46)
No. Not really. Yeah. I mean, they’ve been undulating. They’ve got wide zones, but the yeah, in the end, it hasn’t really gone.
speaker-1 (08:48)
None of them.
overtime not so much. Yeah, we did have some GDP that come out came out this month. ⁓ It was pretty good. Now granted, it’s a little bit backward. It’s always backwards looking in this one was even further backwards looking. So this was third quarter GDP. Some of the information was delayed because of the shutdown. ⁓ GDP, you know, up 4.4%. That doesn’t seem bad to me.
speaker-0 (09:18)
Yeah,
definitely strong above trend. Remember the 2010s where we couldn’t get, you know, over two and a half percent if we wanted, tried everything. We were on Zerp the whole time and we couldn’t get there. Yeah, super strong. Love to see that. We’d love to see more of it. And according to GDP now we hopefully will in Q4.
speaker-1 (09:39)
It’s GDP now. So the expectation for Q.
speaker-0 (09:42)
Right now it’s saying 5.4%.
speaker-1 (09:45)
So I want to throw something out at you. Third quarter was 4.4 GDP now is suggesting fourth quarter is going to be even stronger than that. Why would they lower rates?
speaker-0 (10:00)
Well, pal today said that the risk to inflation and unemployment have decreased. yeah, I mean, certainly you could say if unemployment was taking up like it was the last five months, or six months, if you know, we didn’t get a month, you can make the case we have to do that to keep people working and to, you know, keep
financial conditions easy enough to maintain high employment because everything’s relative as you know, sure, where we’re at on unemployment is not low. Historically, it’s very strong, but everything’s relative.
speaker-1 (10:39)
Yeah, no, no question about it. One of the things that we need to keep developing here in the United States certainly is power. That’s been an ongoing theme that we’ve been talking about for a long time. I saw this earlier this week in Japan. They’re restarting one of the biggest nuclear power plants that was closed for a while because of an earthquake. And that’s a pretty big deal for them because they thought they might really I don’t want to say never reopen it.
But in 2007, there was a big earthquake. They shut down one of the reactors, it came back on. One or two of them came back on. And then they had the Fukushima. So it’s the same power company, which I think is Tokyo Electric, if I’m not mistaken, that owns Fukushima. And this is another it’s the largest power plant in the world with seven different reactors. And it’s been offline since, I think 2013.
And we shut down after that to make sure that was shored up because they’ve had a few earthquakes there. the 2011 wasn’t the 2007 earthquake was right next to him. It was about 16 miles away. The 2011 was much farther. Obviously, that was the Fukushima where they had that massive tsunami that came through.
speaker-0 (12:00)
radiated the fish. Did you see I saw down in the South China Sea like emanating down from sort of Northeastern China, there’s a huge radiated. Now it’s not unsafe to humans or unsafe to even fish populations. But I mean, it’s measurable radiation coming down from maybe Cold War era. nuclear plants or something like that. Yeah, yeah. And one Walmart. Yeah, apparently.
speaker-1 (12:22)
That’s where Subway gets all their tuna from.
Yeah,
no, I don’t know about Walmart. I don’t get sued by Walmart, but Subway definitely has their tuna from there. No, that wouldn’t it seem to me that that would be North Korea.
speaker-0 (12:36)
Maybe. Right? Possibly, yeah.
speaker-1 (12:38)
I mean, there could be long lost sub sitting in there from the well from the USSR that’s slowly leaking into that area, right? That’s right there below the former Soviet Union on that on the west coast over the East Coast East Coast. ⁓
speaker-0 (12:54)
As easy as it goes. Yeah.
uranium’s
really been popping though I love to see Japan opening up power plants I think Germany is admitted they made a mistake shutting their nuclear plants ⁓ that the most precious commodity and I’m not talking gold silver most precious commodity right now to the AI trade is obviously electricity we’re sort of in on the energy play and one of our funds and it just makes sense where we see energy trends going
We need a lot more nuclear. need a lot more everything. If we could get to geothermal and more solar and better capacity storage, we need it all.
speaker-1 (13:35)
She’ll thermal seems like the answer because no one really. We don’t have that much of it so no one has this preconceived notion that it’s good or that’s bad but utilizing the heat from the Earth’s crust to drive steam.
speaker-0 (13:48)
It like both
sides agree that it is good. It doesn’t have any enemies. Yeah.
speaker-1 (13:52)
yet.
It doesn’t have any enemies yet. if you are utilizing traditional fracking to get the steam up, then you probably run into some of those same issues with contamination of water as you do for fracking for ⁓ oil and gas. Right. But, you know, in other parts of the world, ⁓ you know, I think Iceland is one of them, certainly in Norway and Sweden, they use ⁓
speaker-0 (14:18)
just as big bigger than like your driveway geothermal. ⁓ We’re talking like real deep, real high a lot of pressure down
speaker-1 (14:25)
Well,
they make a lot of they make a lot of power from it. It has, you know, certainly a cost to it. But the benefits completely outweigh it. And it’s it’s there. It’s renewable in the sense that it is used by utilizing heat from Earth’s crust. And it’s never going to dissipate. Yeah, right. It’s always I mean, I guess, in a trillion years, the heat might dissipate, but not in our lifetime that we’re going to need
speaker-0 (14:48)
I mean, if that happens, our magnetic field is gone and we’re all dead anyway. Yeah. ⁓ sorry.
speaker-1 (14:55)
There was supposed to be the Aurora Borealis the other day and at least in our neck of the woods they were saying that that could impact some satellites, some GPS positioning and a bunch of other cell phone stuff.
speaker-0 (15:06)
Same with Soar Flares, I’ve never seen that actually happen though.
speaker-1 (15:09)
I have not either, but it has happened. There was a giant solar flare in the 70s that impacted a Canadian grid and they were out if I’m not mistaken, they were out three or four months. Big EMP.
speaker-0 (15:18)
Really?
I think when we had a recent one, think Starlink reported that they had some issues with a couple of satellites had some electronics blown out from one of them. But I mean, I guess I don’t have Starlink, so I can’t speak on if there was an outage or decreased rates.
speaker-1 (15:38)
the
the did you see the back and forth between Elon and ⁓ the CEO of Ryanair? called them an insufferable special needs chimp. boy. And I mean, O’Leary essentially said that in a few years, everybody will have free Wi Fi. It doesn’t necessarily matter now. ⁓ They did they didn’t want to put on starlink or
speaker-0 (15:47)
No, I didn’t.
speaker-1 (16:04)
the CEO said they didn’t want to put it on because it needed an external antenna as opposed to. Yes. Yeah. Yeah. No, it was maybe, maybe a little dish. I don’t know about that. and then, so Elon said that, and then he said, well, he threatened to buy the airline. And so O’Leary started, ⁓ an ad campaign for cheap fares by showing, ⁓ you know, an image of him bashing Elon.
speaker-0 (16:11)
little block on the outside.
speaker-1 (16:33)
I think that’s crazy. He has to get hyped up about everything. I don’t really think that’s a great quality.
speaker-0 (16:40)
Well, when you’re that smart, you ⁓ struggle to relate with people and people disagree with you. You just go off. Trust me. I know.
speaker-1 (16:49)
Is that how you operate? have not found that to be the case, Chris. I have not found that to be the case. You know, so obviously, we talked about the Federal Reserve meeting today. They’re not really doing anything. Expectations are a little bit damper for, you know, going forward for for rate cuts. What does that do for Jay Powell in terms of a lawsuit? Does he stay on? What do you think happens there?
speaker-0 (17:15)
I don’t think there’ll be any lawsuit. I think it’s just bluster intended to make him feel uncomfortable. ⁓ Obviously, when he did that. Rachel kill me for saying this unprecedented little camera interview where he was talking about the ⁓ indictment that was threatened or, you know, what have you that seemed like it was uncomfortable. ⁓ Made markets a little uncomfortable. Sure, but I don’t think anything’s going to come of it.
I don’t think that’s going anywhere.
speaker-1 (17:48)
Doesn’t seem like it. Yeah, doesn’t seem like it.
speaker-0 (17:50)
quieted
down on that front. now that we didn’t cut the day, maybe we’ll get more.
speaker-1 (17:54)
Well, so there’s a few things going on from a ⁓ policy situation that the administration is pushing down. ⁓ Obviously you have ⁓ the situation with the Federal Reserve and criminal lawsuit, but then you have these tariffs that obviously last year was, know, even though the word of the year wasn’t tariff, maybe should have been right. And so
the we’re now waiting for the Supreme Court to come up with with a tariff decision. And it seems like they’re really slow walking this a little bit.
speaker-0 (18:29)
Yeah, it keeps getting kicked out. We were supposed to get it two weeks ago and then they said no, maybe you know, next week, we’ll revisit next week came nothing and now I don’t think there’s anything scheduled relating to it. So that’s kind of interesting. It’s something you generally would have thought they wanted to act quickly on because those tariffs are piling up and if they do reverse them, they could minimize it by issuing a ruling.
speaker-1 (18:55)
So I’ve heard different theories on why I mean, if you want to say three months is slow walking, I think the average is three months in terms of ruling. But I’ve heard different opinions, the opinion that I keep coming across in in my, in my scrolling, I guess you could say is that ⁓ they’re trying to delay giving Trump a loss. They have not done that too much. I don’t know if there’s
speaker-0 (19:02)
Yeah, but
do it closer to midterms. They think that’s I figure now would be the sweet spot to you can let that settle. Sure, they shouldn’t be thinking about elections and politics just like the Federal Reserve shouldn’t be but you know, everyone has opinions on whether it influences decisions or not for better or worse.
speaker-1 (19:39)
Do you think
the Federal Reserve is waiting for the Supreme Court to rule? Not not waiting, but do think they’re accounting for a Supreme Court ruling in determining what they’re going to do? You know, so we we had Andy Jaffe ⁓ of Amazon fame come out and say that you know they’re starting to see some of these tariff expenses come through and can be inflationary. Not to mention they laid off.
I think there was a news today or yesterday, they laid off 16,000 more people.
speaker-0 (20:13)
They’re automating. That’s what they’re doing. They’re going to be the most robotic, I think, firm of their size by far. ⁓ So I think that’s more so they’re finding ways around having people in their warehouses. But yeah, that’s definitely a thing. We know they were going to put on the cost related to tariffs into like their quote when you were checking out and Bezos stepped in and was like, heck no.
I’m not, you’re not bringing down that heck fire on me. That is done. I’m not CEO anymore, but he has the power to, you know, move.
speaker-1 (20:47)
He certainly does. But I’m just curious, know, the Federal Reserve, I don’t think that they’re waiting, but I think that that’s playing into their calculation.
speaker-0 (20:57)
Supreme court had to weigh in on ⁓ Cook, you know, so, you know, they did have their own case there. There were some negotiations and some rulings sort out there and she can stay in place and still anything’s proven or till there’s a verdict. I think is what basically the Supreme Court said. So effectively they keep their independence on that front. Yeah. But this just all goes back to sure. Last year was tariff volatility.
we did just have Trump threatened, tariffs on Canada again, if they did a deal with China. but again, that was more bluster, basically him saying, I’m really not happy with this. Carney, you better turn around after what you said in Davos. ⁓ so, but Carney did sort of step back, but anyway, that’s besides the point. I think this is just policy volatility at this point. We saw he issued that threat. Doesn’t, I don’t think anything can come of it.
at least immediately, but he issued the threat that they, the banks had a deadline to only charge a max of 10 % on credit cards. Like we all know how that turns out. just means that means half the people that have credit card just won’t have a credit card and they’ll basically decline it and close their cards because they’ll just take away credit. And that’s tightening monetary.
speaker-1 (22:17)
Yeah, I don’t know that I don’t know that the administration recognizes that or understands it. It doesn’t seem like a positive thing. ⁓ you know, it’s not a high priority data point, but we certainly do look at ⁓ consumer credit on a monthly basis. The numbers put out.
speaker-0 (22:32)
It’s still hit financials though. They’re getting hit this year so far.
speaker-1 (22:35)
Well,
not to mention, the president, think is now suing JP Morgan for five, gazillion for banking. I’m curious, though, it seemed like ⁓ Jamie Dimon came out and made reference to why that he was debanked. They saying there was regulatory ⁓ regulatory reasons, which leads me to think that maybe the administration or the president doesn’t want
speaker-0 (22:40)
Yes.
speaker-1 (23:04)
the reason even though they they are trying to force this lawsuit, but maybe they don’t really want the reason why he was deep banked to come out.
speaker-0 (23:12)
Interesting. Yeah. Maybe. like if you don’t want to come out, you just let that puppy lay down.
speaker-1 (23:19)
Yeah,
well, I don’t know that they I don’t know that they fully understand what they’re doing with with regards to this.
speaker-0 (23:25)
We had some more policy volatility, we’ll call it, um, with healthcare, obviously the major insurers got wallop this week. Um, you know, each year generally you’ll have Medicare, um, the spending increase go up almost like a COLA cost of living adjustment. It’ll move up because things cost more money, what have you. Last year it was 5 % and estimates this year were for five to 6%.
Trump came out and said, how about 0.09 % increase and UNH and all those guys, they were down 15, 20 % CVS, basically everywhere up and down the insurance side of things. So it’s just another thing where it’s like, you don’t know what’s going to, what policy is going to come out or what tweet or truth is going to come out. And it’s an interesting place to ⁓ try and navigate things.
speaker-1 (24:18)
you know the one thing that I think you have to give the current administration credit for is the health care side of it and you know I’m not I don’t necessarily go around saying that all the time but there does need to be more accountability in the world of health care right and I’m not sure that what he’s saying is is necessarily the exact way to do it I think maybe more of a deep comprehensive dive into we’ll call them the middleman the PBMs out there they seem to be
extrapolating a lot of cash flow from the government’s subsidization of health care.
speaker-0 (24:54)
Well, that’s a great point. you sort of my mind went to, as you’re saying that think about college whenever, you know, federal loans and subsidies go up, what’s going up lock and step with that their tuition. Yeah. So is that the same thing in Medicare is well, if we get 6 % more in subsidies, suddenly just every line item we have goes up five, 6%. And suddenly we’re, know, is that how that works? Just sort of because that’s how essentially college tuition works.
speaker-1 (25:22)
So are we going to get to a point in terms of affordability? Forget who’s in the administration, meaning which side or which president, but are we going to get to a point in affordability where they simply just say, listen, there are certain areas that we as a country can be completely capitalistic about. And then there are certain areas where we have to put in price controls to make sure that everybody can afford it. I mean, is that where we’re going to be at?
speaker-0 (25:50)
I know, just, it’s possible that they put caps on different.
speaker-1 (25:54)
And healthcare
would be one of those things, right?
speaker-0 (25:56)
Yeah,
yeah, I think about and this was back in like, 2008, when I was in high school, sprained my ankle playing ball. And you know, I went into the ER because I don’t know, went to the first friend ankle, because it blew up, you know. And, you know, I get charged. I didn’t know this until like, my parents said it, you know, months later, when you get the bill for things. It was a $95 thermal conditioning unit. It was a bag of ice.
Water, really cold water in a bag. Ice, 95 bucks. Now they will say, that’s to help pay for the nurses and you know, no, you’re not, you can find other ways to bill appropriately, but $95 for ice is not appropriate.
speaker-1 (26:42)
seem that should be there was a time period and someone out there can probably correct me on this if I’m if I’m incorrect, but what’s the rule on treating people as they come into the ER in terms of having insurance or not no insurance? So my my thought was that they say they have to charge these prices because they are also required by law to treat people that don’t have insurance. And so essentially everybody’s paying more. This goes back to the whole
⁓ affordable care act where they wanted to the teeth of the affordable
speaker-0 (27:17)
They said prices would go down because everybody would have paid for insurance, but they didn’t go down.
speaker-1 (27:22)
But so if you go back a little bit, the Supreme Court ruled that so the teeth of the Affordable Care Act was the mandate that everybody had to have insurance. And then the Supreme Court
speaker-0 (27:33)
It was mandated tax to pay for.
speaker-1 (27:36)
that that was illegal that they did they weren’t allowed to mandate that everybody had insurance. And that’s where you see the price increases happening. I’m not saying that they weren’t happening before that. But the majority of the price increases have happened after the Supreme Court ruled that that was illegal. And I think the whole situation was if everybody had insurance and it was required to have it, that the prices would be stable. I don’t know. You know, that’s I can’t tell you that they would be or wouldn’t be. But I think that was the point of it.
And when you took out the teeth of the law, boom, all of a sudden, the the mechanism in place to make sure that price, I don’t make sure is not the right word to resist inflationary prices in healthcare was taken out. I wasn’t expecting to this conversation today. We didn’t have that in our notes for this. But I really think that something needs to be done from a healthcare perspective. I mean, there’s people that can afford to shelf insure.
there’s people that can pay the forward to pay insurance. There’s people that are on the subsidization, some of them obviously losing that subsidization or will ⁓ if if they don’t want to spend the money on it. And then there’s a big group of people that don’t have insurance. You know, anyway, you look at it. So what’s the what what do do with all those people?
speaker-0 (28:56)
I don’t know. I just know since 2000, I think inflation comes out to like 93 % for average of all goods. And I’ll tell you what, I’m pretty sure healthcare is like 180 % plus or 200 % plus it’s somewhere in that range. I do have the actual staff at my desk. don’t we weren’t we weren’t planning to have this conversation. So I don’t have that tuition here, right? Yep.
speaker-1 (29:21)
I mean those those the two two giant things over the last 25 years I mean if you look at the price of gadgets televisions computer
speaker-0 (29:30)
down 98 % of the TVs are. Yeah. Yeah, that’s wild.
speaker-1 (29:34)
There’s no question about it. We’re looking for a new TV ⁓ and we’re going to spend probably the same amount that we spent seven or eight years ago on a television and probably get a much better quality television even bigger for the same dollar.
speaker-0 (29:47)
All right. I saw Texas instruments was up big today because they said they’re going to be getting into data centers with, with, you know, I’m like, of course you are getting into data centers. Great. Very, very rich. Okay. Yeah. But hold on, hold on. Me and Pierce had a back and forth Pierce, our new investment analyst. When I bought that crappy little CFA calculator, which is very basic, it’s not
speaker-1 (30:09)
to TI 8082.
speaker-0 (30:12)
It’s a basic one. They don’t give you like all the buttons. So you really have to do everything. It’s awful. And yet it’s still $70.
speaker-1 (30:19)
This is a
personal grievance with Texas Instruments.
speaker-0 (30:22)
Yes,
it is. And the CFA mandates, you can only use them or one other calculator. And it’s the most basic calculator that I swear to goodness probably cost them $1 to make.
speaker-1 (30:33)
We’d surprised if it was that much.
speaker-0 (30:40)
me nuts. That’s how did that not go down more than TVs? That should be down 98 % it should it should be basically okay, you want to talk about socialism, it should be a global guarantee that you have access to a calculator not for $70.
speaker-1 (30:56)
Well, you can get a calculator. It’s not for $70.
speaker-0 (31:01)
Now if I want to sit in the CFA, glad that’s done.
speaker-1 (31:03)
Okay,
alright, so listen, let’s just go back to Amazon for a little bit. ⁓ We did our 2026 update for advisors ⁓ two weeks ago and one of the things that we talked about was labor market, right? We kind of went in depth on some of that stuff and my position was that in ⁓ COVID, know, obviously we lost a lot of jobs really quick and then we had to bring them back and now we’re in this position not bring it back but over hire.
We talked about this last last episode and now we’re in this position of you know, right sizing in Amazon laying off 30,000. I bring this up again because I don’t think that this is a canary in the coal mine for something coming down the tracks. I think this is more just a rejiggering. That’s a technical term of of what they did after COVID hiring and I don’t think it is, you know,
idiosyncratic in the sense that it is just Amazon or it’s just technology. I think all businesses right now are in the process of revisiting it and maybe 2026 or maybe the next quarter or the next two quarters is a little bit slower than it’s been over the last five years post COVID. But in the end, I’m pretty convinced that the productivity gains that are coming down the pipeline ⁓ this year, next year and in the foreseeable future are going to help drive employment.
And maybe it’s not all going to be in technology, not that it all was ⁓ since COVID, but a lot of tech was doing a lot of hiring.
speaker-0 (32:42)
Yeah, we sort of talked about on that call with our advisors is that we expect a trickle down of AI, not trickle down economics trickle down AI where you have the value companies start benefiting from it. You see their profit margins boost, you see the media, mid caps and small caps, their profit margins start to increase as they can afford more automation down the line. Because you know, we talked about how awesome Ford
Profit margins right now are 14.3 % or 14.6 % for the S &P 500. That is awesome. Higher than it’s ever been. But mid caps and small caps are significantly lower. And if we can get their profit margins moving too, they are already cheap. But you get those profit margins and those earnings up. They could have some real strength in the future here.
speaker-1 (33:35)
Yeah, what about housing though? you know, residential housing makes up about 5 % of GDP and it has been stuck in I would say in reverse, but it has been stuck for a while. We have.
speaker-0 (33:46)
New homes became cheaper than existing homes, I think, for the time in a long time.
speaker-1 (33:51)
they’ve they’ve downsized right there’s new homes the the average square footage has gone down over the last few years. Right or combined spaces though certainly no dining rooms. right. knew. Yeah, no, dining rooms. But now you have the administration which is suggesting that ⁓ institutional investors shouldn’t be buying residential houses. I don’t personally disagree with that. But I don’t know how you square that up with
speaker-0 (33:57)
No living room.
That’s why I meant that.
speaker-1 (34:19)
more of a capitalistic situation. I’m the number that I heard was that institutional investing is about 1 % of all the houses that are bought in 2025. 1 % was these large buyers.
speaker-0 (34:35)
think what should have been done is an incentive or some sort of tax breaker credit for them to invest in new housing units, not to buy existing units. And that’s the 1 % is what you’re referring to that size of existing homes they are buying. They should be incentivized rather than restrict them from buying and I agree to why are they buying you know, individual houses, but more importantly, they should be incentivized.
speaker-1 (34:51)
Right, exactly.
speaker-0 (35:02)
to take all this money, think about BlackRock and all the money they have, the behemoth they are, what they could do if they get incentivized to start building more homes, because that’s the crux of the whole problem. We talked about lowering interest rates and how you subsidize if the government does a down payment and they own a slice of your home or just giving a subsidized interest rate. Truly the issue is obviously we need more homes.
speaker-1 (35:24)
And and so one of the things that I think that you might see, I mean, there’s going to be winners if if the administration is serious about this, meaning capping institutional buyers, there are probably going to be some winners from that. And it’s going to be the bill to rent companies. And that can be, you know, individual homes, which there’s certainly less of bill to rent, but then big apartment complexes. Right. So we have we have a big apartment complex coming to our area. ⁓
I wasn’t thinking about working this way in, but in this giant complex that’s coming over local to us, ⁓ we’re getting, did you know we’re getting a Costco?
speaker-0 (36:03)
Really?
speaker-1 (36:06)
It’s
a done deal. are we are getting a Costco so our
speaker-0 (36:08)
Can
ditch my Sam’s Club now?
speaker-1 (36:11)
you don’t need to but interestingly enough I’m not a Costco guy because we don’t have one local to us but I might become one.
speaker-0 (36:19)
Yeah, I don’t know. Interesting. I can start getting those Kirkland signature balls. Make sure it’s the right version. That’s really good.
speaker-1 (36:25)
But so that that Costco is going to be pulled part of a mixed use area here in the Reading, Pennsylvania area where they’re supposed to have something like six or 700 rental units and the the build to rent space looks interesting. ⁓ In the future, we definitely need more housing. We need this is where I in full agreement with the administration. We need.
quicker regulation or less regulation on where you can build. And I don’t mean in like floodplains and things like that. You don’t want to build there. ⁓
speaker-0 (37:00)
But we shouldn’t have to wait 12 months for a permit.
speaker-1 (37:04)
Let’s put and maybe maybe it’s technology that actually pushes this forward and helps the whole permitting process and bring it down, you know by half or three quarters to get that through builders would love it. ⁓ It would make financing a little bit easier because you wouldn’t have to go through this whole process of waiting for it. ⁓ They could tell you right away and I don’t mean an individual.
speaker-0 (37:25)
If only
we knew a guy who understood real estate and building, who could really step in and help us through this.
speaker-1 (37:33)
Yeah, I wonder
who do you think that would be?
speaker-0 (37:36)
I don’t know. There’s got to be someone. Yeah.
speaker-1 (37:39)
⁓ but so build to rent homes, I think are going to be significantly bigger in the future than they are now, but we need more housing across the board. ⁓
speaker-0 (37:50)
You see coming out 76 the whole way out of Philadelphia, it’s going farther and farther all the way out to like Coatesville now, where it’s just massive built rental things where you have, you know, 150 units and they’re nice. They’re new. Yeah. Not a place to live. Probably expensive, but not a bad place.
speaker-1 (38:08)
You brought up the term pike, is 76 here locally. I don’t know if you noticed. Did you realize that they took down all of the toll booths?
speaker-0 (38:17)
Not until you mentioned and we went to that Sixers game. Yeah, I was just like, Oh yeah, where’d it go?
speaker-1 (38:22)
Yeah, so King of Prussia was this massive toll booth like 10 or 11 booths on on either side of it. Yeah, it could have been more giant toll booths. But most all of the toll booths here in Pennsylvania have been removed from the turnpike, which is nutty. And you know, it’s all technology based. And you you know, give it 10 or 15 years. And you’ll be talking to new drivers and you’ll talk about when we had a person
speaker-0 (38:40)
Yeah.
speaker-1 (38:52)
sitting in a toll booth collecting money from you with cash or something like that and they’re just going to look at you like you had three heads. And so
speaker-0 (38:59)
Yeah, right.
Insurance is probably happy with that people won’t hit them and that’s probably a very high risk job. The insurance for those employees is probably a lot because they have to walk between the stalls, you know.
speaker-1 (39:12)
And
no question about it. But therein lies one of the rubs is right, you think, well, ⁓ technology going to take all the jobs away. I personally don’t think that’s the case. I think technology is going to help productivity. But I don’t think it’s going to take all the jobs away. But who you know, I’m going to grow up and I’m going to be a toll booth collector. I mean, that’s not a thing. Yeah. Right. Yeah.
speaker-0 (39:34)
necessity.
Who knows you could be really friendly and you have 30 seconds to interact with someone and you just thrive off that if like Mr. I could see long fellow deeds enjoying that job.
speaker-1 (39:42)
I waited 30 seconds for a toll.
I
mean, those are the jobs that are ripe for disillusioned, disbandment. That’s the word I’m looking for. Disappear. I mean, they totally are. There’s no reason that we should have a person sitting in a toll booth. Yeah, it doesn’t make any sense. So that leads me to another thing, which is the we’re scheduled 2026 looks like the first year that we’re going to have a net loss on immigration.
speaker-0 (39:59)
pre-automated and distributed.
speaker-1 (40:20)
So historically speaking, we’ve had roughly two and a half to three million net positive people coming into the United States. 2026 looks like it’s again, first year in a long time. That could be a net loss. And then you think.
speaker-0 (40:35)
to get those flows or people just going to stand put.
speaker-1 (40:38)
You know that I don’t I’m not smart enough to know that answer. I don’t think Central Americans are going to wind up going to Europe. I that doesn’t make any sense. ⁓ But if there are jobs that are menial jobs that are being replaced by artificial intelligence or robots ⁓ and we are having less people come in I mean one could make a case that those two things align with each other and are parallel to.
Okay, maybe we’re going to have less job growth, but we’re also going to have less people growth. Now, I think less people growth in the end is probably a net negative for GDP over time. There would be economists that would argue that, the productivity gains are going to help GDP. And so they’ll still grow, but they GDP may not grow as much. And if you look at a country that has had almost net zero immigration for a long period of time,
Japan. Yeah, exactly. Right. And replacement rates, very, very low there. I mean, they had a 30 year period where GDP was really tough to come by the GDP growth, I should say it was really tough to come by. ⁓ You know, so we hopefully that that’s not in our future. But I’m not necessarily opposed to having slower jobs if there is net, ⁓ significantly net less immigration.
speaker-0 (42:01)
Right.
speaker-1 (42:02)
I think in the end, that’s not necessarily the worst thing ever. And maybe it only happens for a year or two. Maybe it only happens in this administration. We have no idea how this whole thing is going to play out. But right at the moment.
speaker-0 (42:14)
So are we going to get wage growth at a higher rate? So we have productivity that should move up with automation and we have less immigration. Do we think we’ll get some wage growth again where we can start outpacing inflation? I mean, we are right now. We’re outpacing inflation for the last couple of years.
speaker-1 (42:32)
If you think about the jobs that are going to be automated and you think about the jobs that people don’t want to do, you tend to think about a low-wage ⁓ position that could be filled by a temporary worker, whether that’s a visa worker in the case of ⁓ agricultural industry or whether that is somebody that is here. ⁓
speaker-0 (42:58)
10 extra customer service people that you have to train up and have to be all on the same page. You could get a really, really good chat bot eventually that can just sort of.
speaker-1 (43:06)
I don’t know about the chat bot. My thought process was if if there are if those people aren’t here to fill it and you have to fill it, you’re going to have you’re going to have wage inflation in the sense that you’re not going to be able to get people to do it at the rate that those other people were able to do it. And that to me seems like wage inflation would would have to happen.
speaker-0 (43:28)
Yeah, right.
speaker-1 (43:30)
I mean, 10 bucks an hour, $15 an hour, that’s not going to cut it on a lot of those jobs that people don’t want to do.
speaker-0 (43:35)
Yeah, I agree with that.
speaker-1 (43:38)
I certainly don’t want to do it. So yeah, no, no side hustles for me. ⁓ What else you got?
speaker-0 (43:40)
Sightless.
on everything.
speaker-1 (43:48)
I just wanna go back to we were here two weeks ago and we were talking about the Golden Globes and then a few week and a half ago we got the Oscar nominations. So we’ve been trying to catch up on some of those. Have you seen any of the nominated movies? Okay, so we’ve watched two in the last few weeks, ⁓ one battle after another and then Sinners. And I think they’re both quality. I can see why they would be nominated. It would be something for people to watch.
totally different movies. One is kind of a yeah, definitely a little bit of vampire, a little bit of zombie, not so much scary, but interesting, interesting to watch. And one is more of a Leo epic about a long lost daughter and immigration and Sean Penn’s in it. He kills it. You see him pop up in some random stuff. And this was one of those rant random things that he’s in. He was awesome.
speaker-0 (44:21)
vampire.
speaker-1 (44:46)
I’d recommend it. But the other ones out there, know, Marty Supreme, we’re going to try to see that Frankenstein, begonia, train dreams, hamnet, sentimental value. They’re all there. And our goal is to try to watch them all if we can.
speaker-0 (45:00)
⁓ so we’re going to Disney next week and we’ve been trying to get the kids up because Livy like wants to watch two movies. That’s all just on repeat. We’ve seen frozen. We’ve seen lion King about probably 40,000 times, three, four times a day. Seriously. It’s a, it’s, it’s something. So we tried to expand their Disney horizons and we’ve been picking new movies and Lex and I got into one movie. I’ve, I had never heard of it until we were looking at the rides tomorrow. And I thought it was an interesting concept.
Not a great movie, not a 90 out of 100 or anything like that, but ⁓ kept me entertained. it’s it’s light. It’s a kids show. It’s like PG 13, but it was good. Okay. ⁓ land man just ended. It was a really good final episode in land man. And then we were excited for nights of the seven kingdoms, the game of throne spin off between house, the dragon game of thrones in terms of the timeline. But that’s been kind of strange so far.
speaker-1 (45:58)
You know what else we watched and I’m going to wrap up on this. Save Bert.
speaker-0 (46:03)
Save Bird. What? don’t know what. ⁓
speaker-1 (46:06)
for pressure. He
had a six, ⁓ six episode series that came out called Save Bert. It is really funny. Some people like it, some people won’t but
speaker-0 (46:18)
I have
one more serious thing before we go in there. What’s that? Everybody’s game been worked up on gold and silver, you know, play them all, all the commodities. And you have some people saying super commodity cycle, all these things, which I think are valid. think there’s debasement issues, which are valid concerns, uh, with debt piling up and spending piling up. Um, you also have supply issues on a lot of things like silver. You see that popping and gold going parabolic.
So in the long term, I think the basement trade is a real thing and will probably work out and supply issues and demand increases are legit. But boy, they’ve gone parabolic. were talking about even on a logarithmic chart, like it’s parabolic. It cannot be contained. I’m scared. I would be scared to dip my toe in, like the silver gold right now, unless I was holding for like three,
speaker-1 (47:10)
I mean, even if you are, you may make it out alive on something like that.
speaker-0 (47:13)
Yeah,
it’s scary how how quick and strong it’s moved has been great. We have a couple of miners. Yeah, in our individual equity names, but it’s wild. Yeah, it’s been exciting.
speaker-1 (47:25)
count on staying at the price it is today for any extended period. ⁓
speaker-0 (47:29)
Silver just had a
wild candle. It was up 14%. I think it was Monday. Was it Tuesday or Monday? This whole snow day we had with snowmageddon has me all messed up, but it was up 14 % and then went all the way back red on the day. It was a real ugly candle. I’m like, maybe this is the exhaustion. Maybe we’ll see yourself, but it’s been all right the last two days or last day.
speaker-1 (47:52)
I’m not sure that they can stay as elevated they’ve been. Maybe they just need a little bit of cooling off. Little bit cooling off. I think everybody needs a little bit of cooling off after the whole storm. Maybe cooling off is not the right way. I hope everybody got through it okay. We did some shoveling, some snow blowing. There’s a little bit of ice, but we got through it.
speaker-0 (47:57)
Yeah.
I need a hot tub after that.
My snow blower didn’t work. Didn’t start up for me. It was awful.
speaker-1 (48:19)
You gotta
check that stuff before the snowstorm,
speaker-0 (48:23)
I meant to, had to fix something on it, which I took like an hour to fix. So I didn’t put gas in it intentionally. And then after it took an hour, I thought it was going to take 20 minutes. was just like, I’m done. I’m going to get dinner, went inside and didn’t go back out and check to see if it worked. already put an hour into it. I was just like, it better work. it didn’t.
speaker-1 (48:40)
All right, well there you have it. Check your snow blower before the storm people. for everybody at good life. I’m no Brooks with me, Chris needs have a wonderful, few weeks. We will see you Valentine’s day. Thanks everybody.
Have questions about how this impacts your investment strategy? Reach out to your advisor or email us at marketenthusiast@goodlifefa.com.
The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you consult the appropriate qualified professional prior to making a decision. Economic forecast set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
In Episode 54 of The Market Enthusiast, Noah Brooks and Chris Needs break down the forces driving markets as January 2026 comes to a close, including shifting market leadership, rising power demands from artificial intelligence, and continued uncertainty around economic policy.
With major indexes near record levels, investors are seeing returns come from different places than in recent years. At the same time, policy headlines and infrastructure challenges are playing a growing role in how markets respond to earnings, growth expectations, and future investment trends.
This episode connects what’s happening in markets with the real-world constraints that could shape economic growth in the years ahead.
Markets Near Highs, but Leadership Is Rotating
While the S&P 500 remains close to all-time highs, performance so far in 2026 has been driven less by mega-cap technology stocks and more by small caps, value stocks, and international markets, including strong early gains in emerging markets.
Rather than signaling market stress, this shift reflects a broadening of participation as investors reassess valuations and look for opportunities beyond the largest names in the market.
Rotation like this often occurs when markets transition between cycles, and it can create a healthier foundation for longer-term growth if earnings begin to follow capital flows.
Fed Policy and Valuation Sensitivity
Noah and Chris also discuss the Federal Reserve’s recent decision to hold interest rates steady and how expectations for future rate cuts have started to fade.
With valuations still elevated, markets remain sensitive to changes in the cost of money. When rate-cut expectations shift, multiples can adjust even if corporate earnings remain strong.
The episode highlights why forward guidance and economic expectations may matter more than backward-looking data as investors reassess how long higher interest rates may remain in place.
AI Growth Meets Real-World Infrastructure Limits
While artificial intelligence continues to drive corporate investment, the conversation turns to an often-overlooked constraint: electricity.
Data centers, automation, and cloud infrastructure all require massive and reliable power supplies. As demand accelerates, energy production and grid capacity are becoming critical factors in how fast AI can realistically scale.
Noah and Chris discuss renewed interest in nuclear, geothermal, and other energy sources, and why future technological growth may depend as much on infrastructure investment as on software innovation.
Policy Volatility and Business Uncertainty
Beyond interest rates, the episode also touches on shifting policy signals around tariffs, healthcare spending, and regulatory changes, all of which add layers of uncertainty for businesses making long-term investment decisions.
When rules and costs are less predictable, companies may delay expansion, adjust hiring plans, or rethink capital spending, even in otherwise strong economic environments.
This uncertainty can contribute to market volatility even when headline economic data appears stable.
Labor Trends, Automation, and Productivity
The discussion also explores how automation and AI could influence future employment, productivity, and wage growth, especially as demographic trends and immigration patterns evolve.
Rather than eliminating work entirely, productivity gains may shift where jobs are created and how businesses allocate resources, potentially reshaping labor markets over time.
Understanding these long-term trends helps explain why economic growth can continue even when hiring slows or job categories change.
Practical Lessons as 2026 Unfolds
As markets navigate innovation, policy shifts, and changing leadership, the episode reinforces several core principles:
• Diversification matters when leadership rotates
• Infrastructure can be as important as innovation
• Valuations remain sensitive to interest rates
• Policy uncertainty can influence business behavior
• Long-term strategy matters more than short-term headlines
Strong markets are built on more than momentum alone. Sustainable growth depends on capital discipline, reliable infrastructure, and stable economic conditions that allow both businesses and households to plan with confidence.
Key Topics Covered in This Episode
• Market rotation toward small caps and international stocks
• Federal Reserve rate decisions and valuation sensitivity
• AI-driven capital spending and energy demand
• Nuclear, geothermal, and power infrastructure challenges
• Policy volatility and business uncertainty
• Automation, productivity, and labor market trends
Investor Takeaways
Market Leadership Changes: Different areas of the market take turns leading returns.
Power Matters for Growth: AI expansion depends on reliable energy infrastructure.
Rates Still Influence Valuations: Expectations can shift quickly with Fed policy.
Policy Creates Uncertainty: Tariffs and regulation affect long-term planning.
Discipline Still Wins: Diversification and patience remain critical.
Listen to the Full Episode
Full Episode Transcript
Hey, welcome back to the market enthusiast. I’m Noah Brooks and obviously Chris needs with me today.
speaker-1 (00:00)
Hello. So what’s going on with your eye over here? ⁓
speaker-0 (00:05)
Hello.
Well, Fight Club, wait, not supposed to talk about Fight Club, so basketball. Okay. Probably can’t even tell. We’re probably like mid HD, not quite high HD.
speaker-1 (00:14)
⁓ okay.
I can tell. I mean, you’re gonna have a black eye tomorrow.
speaker-0 (00:23)
little bump head to head. I have a hard head. It’s all good. He had a little cut. He was bleeding, but all good. ⁓ Yeah. Well,
speaker-1 (00:28)
other guy look
I hope you don’t have a black eye tomorrow. No seriously. Uh, welcome back to the market enthusiasts. We are at the end of January, 2026. I cannot believe it’s 2026 in my head. I still think it’s 1997. That was a great year, right? It was a great year. It was a good year. It was a good year for lots of different reasons. Um, including the economy, right? The, the late nineties were outstanding. Everybody remember remembers them as a
speaker-0 (00:46)
I was flying.
I mean.
speaker-1 (01:03)
one of the time periods, one of the few time periods in history, certainly recent history that we’ve had a ⁓ no deficit in the budget. mean we didn’t have any debt, but we didn’t have a budget deficit ⁓ in the beginning of the 2000s until the dot com crash. How does that compare to today, Chris?
speaker-0 (01:25)
We’ll be at 40 trillion in no time probably by the end of the year, I would guess. Yeah. don’t know where the ticker is at right now, but it’s moving up fast. Hey, had us debt clock ever go to that. That’s trippy.
speaker-1 (01:36)
It’s
just spinning. Yeah. Yeah, all the time. But here we are. End of January S &P 500 up.
speaker-0 (01:39)
to control.
7,000 today briefly hanging out around there. Yeah.
speaker-1 (01:51)
⁓ S &P up just a little bit for the year. ⁓ Value up over 4%. Growth is really flat for the year. Almost nothing. S &P up just shy of two when we came in to record. ⁓
speaker-0 (02:05)
Russell 1K growth is down like 0.3%. Yeah.
speaker-1 (02:09)
Yeah,
growth the mag seven not necessarily working so well this year. Big winner though, international, right developed international
speaker-0 (02:17)
Latin
America, Latin America up 17 % here today. Yeah. Yeah. We should have moved into that. Huh? We’ve been talking about that for years now. Nearshoring. That was our reasoning behind talking, talking about it, but
speaker-1 (02:30)
it it didn’t play out. It didn’t play out. But emerging markets. I mean, we have healthy allocation emerging markets. And, you know, that’s they’re up 11 % for the year. Yes, ripping and roaring. And small caps and mid caps up ⁓ over 5 % on both accounts. You know, so there’s there’s a lot of rotation. Now we’ve been talking about rotation for a long time. And I’m not sure that this is going to stick. But it certainly is working in the first month of January.
Yeah, there’s no question about it. And we’ve had a fair amount of economic ⁓ data coming in. today, ⁓ earlier today, the Federal Reserve met ⁓ and they did nothing.
speaker-0 (03:13)
Yep.
And Mirren only wanted 25 basis points. That’s shocking. Yeah, that’s shocking. And we also had Waller who also went 25. So two descents.
speaker-1 (03:24)
Yeah,
but so out of 12 we had two people dissenting. It doesn’t seem like we’re going to get cuts in the short term. We’ve had three cuts so far and you really what they’re they’re cutting or not cutting is the cost of money, right? You know, and so the question becomes it was there to dovish an expectation for a lot of cuts in 2026 and then those expectations are kind of fading.
And what’s that due to the market for the end of the year?
speaker-0 (03:55)
I think to as of like a week or two ago, know, Fed futures were pricing in 1.825 basis point cuts. ⁓ You know, my fear for the market is that we don’t get any. And like you said, we, you know, you have the multiples that are expecting a certain price of money, certain interest rate. And if we don’t get that, that could be one risk to the story to this, you know, bull market we’re in obviously. ⁓
big earnings week that we’re in the midst of that’ll certainly have a lot to do with if we keep this momentum going. I know you said the S and P 500 isn’t up much to about 2 % 2 % year date. That’s not a bad month at all actually, but uh, you know, it just seems a little slower in comparison when we’re looking at what smalls and mids are doing and international is doing. Um, but yeah, we have four of the mag seven reporting this week. That’s a massive amount of
speaker-1 (04:34)
Yeah, a little.
speaker-0 (04:51)
market capitalization. So Tesla and Meta are actually reporting today after the bell. So we don’t know those results yet, but you probably know when this comes out.
speaker-1 (05:00)
I mean, I’m sure they’re gonna be good. It’s just a question of how good and then what are they gonna say at the end? Yeah, right. mean, they they
speaker-0 (05:07)
don’t
know if Tesla’s will be, we’re not in the prediction markets here, but I mean, it’s all it is, is about what Elon says. If he says they’re going to roll out autonomous driving into 10 more cities by year end, stock will probably love it. Or if he says optimists will be out in Q1 27, the market will probably love it, even if they don’t sell any cars.
speaker-1 (05:27)
So let’s talk about this FSD for a second. ⁓ You know, we are not the leader even though Tesla has been around for a long time with with self-driving cars. The United States and Tesla is are not the leaders in self-driving cars for that. have to look to China, right?
speaker-0 (05:46)
Waymo
Waymo is they utilize all the technologies but they’re not on a on the scale of the Chinese
speaker-1 (05:52)
So
in in China, they have many more cars had that have driven many more miles ⁓ of autonomous taxis, robocars, however you want to describe it. And they have a lot more data to collect on it. So you have the big companies, Gili and BYD over there. Over here, you know, we have obviously Tesla is the big one and you have Waymo ⁓ Waymo is using ⁓ radar and LIDAR.
Tesla’s simply just using cameras. Yeah, right. So you have it. I know you use it occasionally. What about we had this conversation a few weeks ago? What about like fog and rain? Can it see through that?
speaker-0 (06:36)
In my ex, so I don’t use it often as you know, I only use it very infrequently, but you get a lot of error messages that like one of the cameras is blocked when it’s like raining or super foggy with certain your left pillar camera is blocked, something like that. So there is issues. Now I’ve used the assisted like auto steer, which isn’t the full FSD in the rain and there’s never been an issue even when it says that.
⁓ but yeah, I don’t utilize it enough to really know what would happen.
speaker-1 (07:12)
I mean, if I had a choice though, I would want all the tech, not just the camera tech.
speaker-0 (07:17)
Right.
It’s a price thing. think. I mean, well, Tesla’s are very affordable vehicles relatively, you know, when you’re looking at comparison, Waymo’s setups are pretty expensive. Yeah.
speaker-1 (07:29)
But you can buy a Tesla. can’t buy Waymo. And they go around with all that stuff on their roofs. It’s not like, yeah, it’s not something we really want to drive. But I mean, it’s interesting stuff. I would tend to think that the laws are going to need to catch up to the technology before they can really have a rollout across the country. Even even more cities. I think they they have to really do something with the the ⁓
speaker-0 (07:32)
Right? Yeah.
Yeah.
speaker-1 (07:58)
the legality of it. We talked about this a weeks ago, there was a lady who had a baby in the back of a Waymo and Austin, I think it was. And they finally, you know, they, they sensed the stress, they got someone to driver someone remotely to driver. I think she did deliver in in the car, though. Yeah, I mean, there’s there’s some things that need to happen. But I’m ready to take one of those rides. I’m ready to hop in a way.
speaker-0 (08:22)
Yeah, it’s
not as scary as you think.
speaker-1 (08:25)
Do think they’re gonna you think Tesla is gonna roll out a bunch of cities? You said that
speaker-0 (08:29)
What are the, think they’re only in like two or three right now. ⁓ Yeah, I’m sure Elon will say they’re going to, even if they don’t, I’m sure he’s going to say they are. And, know, for, stock appreciation purposes.
speaker-1 (08:43)
They have not been all that strong.
speaker-0 (08:46)
No. Not really. Yeah. I mean, they’ve been undulating. They’ve got wide zones, but the yeah, in the end, it hasn’t really gone.
speaker-1 (08:48)
None of them.
overtime not so much. Yeah, we did have some GDP that come out came out this month. ⁓ It was pretty good. Now granted, it’s a little bit backward. It’s always backwards looking in this one was even further backwards looking. So this was third quarter GDP. Some of the information was delayed because of the shutdown. ⁓ GDP, you know, up 4.4%. That doesn’t seem bad to me.
speaker-0 (09:18)
Yeah,
definitely strong above trend. Remember the 2010s where we couldn’t get, you know, over two and a half percent if we wanted, tried everything. We were on Zerp the whole time and we couldn’t get there. Yeah, super strong. Love to see that. We’d love to see more of it. And according to GDP now we hopefully will in Q4.
speaker-1 (09:39)
It’s GDP now. So the expectation for Q.
speaker-0 (09:42)
Right now it’s saying 5.4%.
speaker-1 (09:45)
So I want to throw something out at you. Third quarter was 4.4 GDP now is suggesting fourth quarter is going to be even stronger than that. Why would they lower rates?
speaker-0 (10:00)
Well, pal today said that the risk to inflation and unemployment have decreased. yeah, I mean, certainly you could say if unemployment was taking up like it was the last five months, or six months, if you know, we didn’t get a month, you can make the case we have to do that to keep people working and to, you know, keep
financial conditions easy enough to maintain high employment because everything’s relative as you know, sure, where we’re at on unemployment is not low. Historically, it’s very strong, but everything’s relative.
speaker-1 (10:39)
Yeah, no, no question about it. One of the things that we need to keep developing here in the United States certainly is power. That’s been an ongoing theme that we’ve been talking about for a long time. I saw this earlier this week in Japan. They’re restarting one of the biggest nuclear power plants that was closed for a while because of an earthquake. And that’s a pretty big deal for them because they thought they might really I don’t want to say never reopen it.
But in 2007, there was a big earthquake. They shut down one of the reactors, it came back on. One or two of them came back on. And then they had the Fukushima. So it’s the same power company, which I think is Tokyo Electric, if I’m not mistaken, that owns Fukushima. And this is another it’s the largest power plant in the world with seven different reactors. And it’s been offline since, I think 2013.
And we shut down after that to make sure that was shored up because they’ve had a few earthquakes there. the 2011 wasn’t the 2007 earthquake was right next to him. It was about 16 miles away. The 2011 was much farther. Obviously, that was the Fukushima where they had that massive tsunami that came through.
speaker-0 (12:00)
radiated the fish. Did you see I saw down in the South China Sea like emanating down from sort of Northeastern China, there’s a huge radiated. Now it’s not unsafe to humans or unsafe to even fish populations. But I mean, it’s measurable radiation coming down from maybe Cold War era. nuclear plants or something like that. Yeah, yeah. And one Walmart. Yeah, apparently.
speaker-1 (12:22)
That’s where Subway gets all their tuna from.
Yeah,
no, I don’t know about Walmart. I don’t get sued by Walmart, but Subway definitely has their tuna from there. No, that wouldn’t it seem to me that that would be North Korea.
speaker-0 (12:36)
Maybe. Right? Possibly, yeah.
speaker-1 (12:38)
I mean, there could be long lost sub sitting in there from the well from the USSR that’s slowly leaking into that area, right? That’s right there below the former Soviet Union on that on the west coast over the East Coast East Coast. ⁓
speaker-0 (12:54)
As easy as it goes. Yeah.
uranium’s
really been popping though I love to see Japan opening up power plants I think Germany is admitted they made a mistake shutting their nuclear plants ⁓ that the most precious commodity and I’m not talking gold silver most precious commodity right now to the AI trade is obviously electricity we’re sort of in on the energy play and one of our funds and it just makes sense where we see energy trends going
We need a lot more nuclear. need a lot more everything. If we could get to geothermal and more solar and better capacity storage, we need it all.
speaker-1 (13:35)
She’ll thermal seems like the answer because no one really. We don’t have that much of it so no one has this preconceived notion that it’s good or that’s bad but utilizing the heat from the Earth’s crust to drive steam.
speaker-0 (13:48)
It like both
sides agree that it is good. It doesn’t have any enemies. Yeah.
speaker-1 (13:52)
yet.
It doesn’t have any enemies yet. if you are utilizing traditional fracking to get the steam up, then you probably run into some of those same issues with contamination of water as you do for fracking for ⁓ oil and gas. Right. But, you know, in other parts of the world, ⁓ you know, I think Iceland is one of them, certainly in Norway and Sweden, they use ⁓
speaker-0 (14:18)
just as big bigger than like your driveway geothermal. ⁓ We’re talking like real deep, real high a lot of pressure down
speaker-1 (14:25)
Well,
they make a lot of they make a lot of power from it. It has, you know, certainly a cost to it. But the benefits completely outweigh it. And it’s it’s there. It’s renewable in the sense that it is used by utilizing heat from Earth’s crust. And it’s never going to dissipate. Yeah, right. It’s always I mean, I guess, in a trillion years, the heat might dissipate, but not in our lifetime that we’re going to need
speaker-0 (14:48)
I mean, if that happens, our magnetic field is gone and we’re all dead anyway. Yeah. ⁓ sorry.
speaker-1 (14:55)
There was supposed to be the Aurora Borealis the other day and at least in our neck of the woods they were saying that that could impact some satellites, some GPS positioning and a bunch of other cell phone stuff.
speaker-0 (15:06)
Same with Soar Flares, I’ve never seen that actually happen though.
speaker-1 (15:09)
I have not either, but it has happened. There was a giant solar flare in the 70s that impacted a Canadian grid and they were out if I’m not mistaken, they were out three or four months. Big EMP.
speaker-0 (15:18)
Really?
I think when we had a recent one, think Starlink reported that they had some issues with a couple of satellites had some electronics blown out from one of them. But I mean, I guess I don’t have Starlink, so I can’t speak on if there was an outage or decreased rates.
speaker-1 (15:38)
the
the did you see the back and forth between Elon and ⁓ the CEO of Ryanair? called them an insufferable special needs chimp. boy. And I mean, O’Leary essentially said that in a few years, everybody will have free Wi Fi. It doesn’t necessarily matter now. ⁓ They did they didn’t want to put on starlink or
speaker-0 (15:47)
No, I didn’t.
speaker-1 (16:04)
the CEO said they didn’t want to put it on because it needed an external antenna as opposed to. Yes. Yeah. Yeah. No, it was maybe, maybe a little dish. I don’t know about that. and then, so Elon said that, and then he said, well, he threatened to buy the airline. And so O’Leary started, ⁓ an ad campaign for cheap fares by showing, ⁓ you know, an image of him bashing Elon.
speaker-0 (16:11)
little block on the outside.
speaker-1 (16:33)
I think that’s crazy. He has to get hyped up about everything. I don’t really think that’s a great quality.
speaker-0 (16:40)
Well, when you’re that smart, you ⁓ struggle to relate with people and people disagree with you. You just go off. Trust me. I know.
speaker-1 (16:49)
Is that how you operate? have not found that to be the case, Chris. I have not found that to be the case. You know, so obviously, we talked about the Federal Reserve meeting today. They’re not really doing anything. Expectations are a little bit damper for, you know, going forward for for rate cuts. What does that do for Jay Powell in terms of a lawsuit? Does he stay on? What do you think happens there?
speaker-0 (17:15)
I don’t think there’ll be any lawsuit. I think it’s just bluster intended to make him feel uncomfortable. ⁓ Obviously, when he did that. Rachel kill me for saying this unprecedented little camera interview where he was talking about the ⁓ indictment that was threatened or, you know, what have you that seemed like it was uncomfortable. ⁓ Made markets a little uncomfortable. Sure, but I don’t think anything’s going to come of it.
I don’t think that’s going anywhere.
speaker-1 (17:48)
Doesn’t seem like it. Yeah, doesn’t seem like it.
speaker-0 (17:50)
quieted
down on that front. now that we didn’t cut the day, maybe we’ll get more.
speaker-1 (17:54)
Well, so there’s a few things going on from a ⁓ policy situation that the administration is pushing down. ⁓ Obviously you have ⁓ the situation with the Federal Reserve and criminal lawsuit, but then you have these tariffs that obviously last year was, know, even though the word of the year wasn’t tariff, maybe should have been right. And so
the we’re now waiting for the Supreme Court to come up with with a tariff decision. And it seems like they’re really slow walking this a little bit.
speaker-0 (18:29)
Yeah, it keeps getting kicked out. We were supposed to get it two weeks ago and then they said no, maybe you know, next week, we’ll revisit next week came nothing and now I don’t think there’s anything scheduled relating to it. So that’s kind of interesting. It’s something you generally would have thought they wanted to act quickly on because those tariffs are piling up and if they do reverse them, they could minimize it by issuing a ruling.
speaker-1 (18:55)
So I’ve heard different theories on why I mean, if you want to say three months is slow walking, I think the average is three months in terms of ruling. But I’ve heard different opinions, the opinion that I keep coming across in in my, in my scrolling, I guess you could say is that ⁓ they’re trying to delay giving Trump a loss. They have not done that too much. I don’t know if there’s
speaker-0 (19:02)
Yeah, but
do it closer to midterms. They think that’s I figure now would be the sweet spot to you can let that settle. Sure, they shouldn’t be thinking about elections and politics just like the Federal Reserve shouldn’t be but you know, everyone has opinions on whether it influences decisions or not for better or worse.
speaker-1 (19:39)
Do you think
the Federal Reserve is waiting for the Supreme Court to rule? Not not waiting, but do think they’re accounting for a Supreme Court ruling in determining what they’re going to do? You know, so we we had Andy Jaffe ⁓ of Amazon fame come out and say that you know they’re starting to see some of these tariff expenses come through and can be inflationary. Not to mention they laid off.
I think there was a news today or yesterday, they laid off 16,000 more people.
speaker-0 (20:13)
They’re automating. That’s what they’re doing. They’re going to be the most robotic, I think, firm of their size by far. ⁓ So I think that’s more so they’re finding ways around having people in their warehouses. But yeah, that’s definitely a thing. We know they were going to put on the cost related to tariffs into like their quote when you were checking out and Bezos stepped in and was like, heck no.
I’m not, you’re not bringing down that heck fire on me. That is done. I’m not CEO anymore, but he has the power to, you know, move.
speaker-1 (20:47)
He certainly does. But I’m just curious, know, the Federal Reserve, I don’t think that they’re waiting, but I think that that’s playing into their calculation.
speaker-0 (20:57)
Supreme court had to weigh in on ⁓ Cook, you know, so, you know, they did have their own case there. There were some negotiations and some rulings sort out there and she can stay in place and still anything’s proven or till there’s a verdict. I think is what basically the Supreme Court said. So effectively they keep their independence on that front. Yeah. But this just all goes back to sure. Last year was tariff volatility.
we did just have Trump threatened, tariffs on Canada again, if they did a deal with China. but again, that was more bluster, basically him saying, I’m really not happy with this. Carney, you better turn around after what you said in Davos. ⁓ so, but Carney did sort of step back, but anyway, that’s besides the point. I think this is just policy volatility at this point. We saw he issued that threat. Doesn’t, I don’t think anything can come of it.
at least immediately, but he issued the threat that they, the banks had a deadline to only charge a max of 10 % on credit cards. Like we all know how that turns out. just means that means half the people that have credit card just won’t have a credit card and they’ll basically decline it and close their cards because they’ll just take away credit. And that’s tightening monetary.
speaker-1 (22:17)
Yeah, I don’t know that I don’t know that the administration recognizes that or understands it. It doesn’t seem like a positive thing. ⁓ you know, it’s not a high priority data point, but we certainly do look at ⁓ consumer credit on a monthly basis. The numbers put out.
speaker-0 (22:32)
It’s still hit financials though. They’re getting hit this year so far.
speaker-1 (22:35)
Well,
not to mention, the president, think is now suing JP Morgan for five, gazillion for banking. I’m curious, though, it seemed like ⁓ Jamie Dimon came out and made reference to why that he was debanked. They saying there was regulatory ⁓ regulatory reasons, which leads me to think that maybe the administration or the president doesn’t want
speaker-0 (22:40)
Yes.
speaker-1 (23:04)
the reason even though they they are trying to force this lawsuit, but maybe they don’t really want the reason why he was deep banked to come out.
speaker-0 (23:12)
Interesting. Yeah. Maybe. like if you don’t want to come out, you just let that puppy lay down.
speaker-1 (23:19)
Yeah,
well, I don’t know that they I don’t know that they fully understand what they’re doing with with regards to this.
speaker-0 (23:25)
We had some more policy volatility, we’ll call it, um, with healthcare, obviously the major insurers got wallop this week. Um, you know, each year generally you’ll have Medicare, um, the spending increase go up almost like a COLA cost of living adjustment. It’ll move up because things cost more money, what have you. Last year it was 5 % and estimates this year were for five to 6%.
Trump came out and said, how about 0.09 % increase and UNH and all those guys, they were down 15, 20 % CVS, basically everywhere up and down the insurance side of things. So it’s just another thing where it’s like, you don’t know what’s going to, what policy is going to come out or what tweet or truth is going to come out. And it’s an interesting place to ⁓ try and navigate things.
speaker-1 (24:18)
you know the one thing that I think you have to give the current administration credit for is the health care side of it and you know I’m not I don’t necessarily go around saying that all the time but there does need to be more accountability in the world of health care right and I’m not sure that what he’s saying is is necessarily the exact way to do it I think maybe more of a deep comprehensive dive into we’ll call them the middleman the PBMs out there they seem to be
extrapolating a lot of cash flow from the government’s subsidization of health care.
speaker-0 (24:54)
Well, that’s a great point. you sort of my mind went to, as you’re saying that think about college whenever, you know, federal loans and subsidies go up, what’s going up lock and step with that their tuition. Yeah. So is that the same thing in Medicare is well, if we get 6 % more in subsidies, suddenly just every line item we have goes up five, 6%. And suddenly we’re, know, is that how that works? Just sort of because that’s how essentially college tuition works.
speaker-1 (25:22)
So are we going to get to a point in terms of affordability? Forget who’s in the administration, meaning which side or which president, but are we going to get to a point in affordability where they simply just say, listen, there are certain areas that we as a country can be completely capitalistic about. And then there are certain areas where we have to put in price controls to make sure that everybody can afford it. I mean, is that where we’re going to be at?
speaker-0 (25:50)
I know, just, it’s possible that they put caps on different.
speaker-1 (25:54)
And healthcare
would be one of those things, right?
speaker-0 (25:56)
Yeah,
yeah, I think about and this was back in like, 2008, when I was in high school, sprained my ankle playing ball. And you know, I went into the ER because I don’t know, went to the first friend ankle, because it blew up, you know. And, you know, I get charged. I didn’t know this until like, my parents said it, you know, months later, when you get the bill for things. It was a $95 thermal conditioning unit. It was a bag of ice.
Water, really cold water in a bag. Ice, 95 bucks. Now they will say, that’s to help pay for the nurses and you know, no, you’re not, you can find other ways to bill appropriately, but $95 for ice is not appropriate.
speaker-1 (26:42)
seem that should be there was a time period and someone out there can probably correct me on this if I’m if I’m incorrect, but what’s the rule on treating people as they come into the ER in terms of having insurance or not no insurance? So my my thought was that they say they have to charge these prices because they are also required by law to treat people that don’t have insurance. And so essentially everybody’s paying more. This goes back to the whole
⁓ affordable care act where they wanted to the teeth of the affordable
speaker-0 (27:17)
They said prices would go down because everybody would have paid for insurance, but they didn’t go down.
speaker-1 (27:22)
But so if you go back a little bit, the Supreme Court ruled that so the teeth of the Affordable Care Act was the mandate that everybody had to have insurance. And then the Supreme Court
speaker-0 (27:33)
It was mandated tax to pay for.
speaker-1 (27:36)
that that was illegal that they did they weren’t allowed to mandate that everybody had insurance. And that’s where you see the price increases happening. I’m not saying that they weren’t happening before that. But the majority of the price increases have happened after the Supreme Court ruled that that was illegal. And I think the whole situation was if everybody had insurance and it was required to have it, that the prices would be stable. I don’t know. You know, that’s I can’t tell you that they would be or wouldn’t be. But I think that was the point of it.
And when you took out the teeth of the law, boom, all of a sudden, the the mechanism in place to make sure that price, I don’t make sure is not the right word to resist inflationary prices in healthcare was taken out. I wasn’t expecting to this conversation today. We didn’t have that in our notes for this. But I really think that something needs to be done from a healthcare perspective. I mean, there’s people that can afford to shelf insure.
there’s people that can pay the forward to pay insurance. There’s people that are on the subsidization, some of them obviously losing that subsidization or will ⁓ if if they don’t want to spend the money on it. And then there’s a big group of people that don’t have insurance. You know, anyway, you look at it. So what’s the what what do do with all those people?
speaker-0 (28:56)
I don’t know. I just know since 2000, I think inflation comes out to like 93 % for average of all goods. And I’ll tell you what, I’m pretty sure healthcare is like 180 % plus or 200 % plus it’s somewhere in that range. I do have the actual staff at my desk. don’t we weren’t we weren’t planning to have this conversation. So I don’t have that tuition here, right? Yep.
speaker-1 (29:21)
I mean those those the two two giant things over the last 25 years I mean if you look at the price of gadgets televisions computer
speaker-0 (29:30)
down 98 % of the TVs are. Yeah. Yeah, that’s wild.
speaker-1 (29:34)
There’s no question about it. We’re looking for a new TV ⁓ and we’re going to spend probably the same amount that we spent seven or eight years ago on a television and probably get a much better quality television even bigger for the same dollar.
speaker-0 (29:47)
All right. I saw Texas instruments was up big today because they said they’re going to be getting into data centers with, with, you know, I’m like, of course you are getting into data centers. Great. Very, very rich. Okay. Yeah. But hold on, hold on. Me and Pierce had a back and forth Pierce, our new investment analyst. When I bought that crappy little CFA calculator, which is very basic, it’s not
speaker-1 (30:09)
to TI 8082.
speaker-0 (30:12)
It’s a basic one. They don’t give you like all the buttons. So you really have to do everything. It’s awful. And yet it’s still $70.
speaker-1 (30:19)
This is a
personal grievance with Texas Instruments.
speaker-0 (30:22)
Yes,
it is. And the CFA mandates, you can only use them or one other calculator. And it’s the most basic calculator that I swear to goodness probably cost them $1 to make.
speaker-1 (30:33)
We’d surprised if it was that much.
speaker-0 (30:40)
me nuts. That’s how did that not go down more than TVs? That should be down 98 % it should it should be basically okay, you want to talk about socialism, it should be a global guarantee that you have access to a calculator not for $70.
speaker-1 (30:56)
Well, you can get a calculator. It’s not for $70.
speaker-0 (31:01)
Now if I want to sit in the CFA, glad that’s done.
speaker-1 (31:03)
Okay,
alright, so listen, let’s just go back to Amazon for a little bit. ⁓ We did our 2026 update for advisors ⁓ two weeks ago and one of the things that we talked about was labor market, right? We kind of went in depth on some of that stuff and my position was that in ⁓ COVID, know, obviously we lost a lot of jobs really quick and then we had to bring them back and now we’re in this position not bring it back but over hire.
We talked about this last last episode and now we’re in this position of you know, right sizing in Amazon laying off 30,000. I bring this up again because I don’t think that this is a canary in the coal mine for something coming down the tracks. I think this is more just a rejiggering. That’s a technical term of of what they did after COVID hiring and I don’t think it is, you know,
idiosyncratic in the sense that it is just Amazon or it’s just technology. I think all businesses right now are in the process of revisiting it and maybe 2026 or maybe the next quarter or the next two quarters is a little bit slower than it’s been over the last five years post COVID. But in the end, I’m pretty convinced that the productivity gains that are coming down the pipeline ⁓ this year, next year and in the foreseeable future are going to help drive employment.
And maybe it’s not all going to be in technology, not that it all was ⁓ since COVID, but a lot of tech was doing a lot of hiring.
speaker-0 (32:42)
Yeah, we sort of talked about on that call with our advisors is that we expect a trickle down of AI, not trickle down economics trickle down AI where you have the value companies start benefiting from it. You see their profit margins boost, you see the media, mid caps and small caps, their profit margins start to increase as they can afford more automation down the line. Because you know, we talked about how awesome Ford
Profit margins right now are 14.3 % or 14.6 % for the S &P 500. That is awesome. Higher than it’s ever been. But mid caps and small caps are significantly lower. And if we can get their profit margins moving too, they are already cheap. But you get those profit margins and those earnings up. They could have some real strength in the future here.
speaker-1 (33:35)
Yeah, what about housing though? you know, residential housing makes up about 5 % of GDP and it has been stuck in I would say in reverse, but it has been stuck for a while. We have.
speaker-0 (33:46)
New homes became cheaper than existing homes, I think, for the time in a long time.
speaker-1 (33:51)
they’ve they’ve downsized right there’s new homes the the average square footage has gone down over the last few years. Right or combined spaces though certainly no dining rooms. right. knew. Yeah, no, dining rooms. But now you have the administration which is suggesting that ⁓ institutional investors shouldn’t be buying residential houses. I don’t personally disagree with that. But I don’t know how you square that up with
speaker-0 (33:57)
No living room.
That’s why I meant that.
speaker-1 (34:19)
more of a capitalistic situation. I’m the number that I heard was that institutional investing is about 1 % of all the houses that are bought in 2025. 1 % was these large buyers.
speaker-0 (34:35)
think what should have been done is an incentive or some sort of tax breaker credit for them to invest in new housing units, not to buy existing units. And that’s the 1 % is what you’re referring to that size of existing homes they are buying. They should be incentivized rather than restrict them from buying and I agree to why are they buying you know, individual houses, but more importantly, they should be incentivized.
speaker-1 (34:51)
Right, exactly.
speaker-0 (35:02)
to take all this money, think about BlackRock and all the money they have, the behemoth they are, what they could do if they get incentivized to start building more homes, because that’s the crux of the whole problem. We talked about lowering interest rates and how you subsidize if the government does a down payment and they own a slice of your home or just giving a subsidized interest rate. Truly the issue is obviously we need more homes.
speaker-1 (35:24)
And and so one of the things that I think that you might see, I mean, there’s going to be winners if if the administration is serious about this, meaning capping institutional buyers, there are probably going to be some winners from that. And it’s going to be the bill to rent companies. And that can be, you know, individual homes, which there’s certainly less of bill to rent, but then big apartment complexes. Right. So we have we have a big apartment complex coming to our area. ⁓
I wasn’t thinking about working this way in, but in this giant complex that’s coming over local to us, ⁓ we’re getting, did you know we’re getting a Costco?
speaker-0 (36:03)
Really?
speaker-1 (36:06)
It’s
a done deal. are we are getting a Costco so our
speaker-0 (36:08)
Can
ditch my Sam’s Club now?
speaker-1 (36:11)
you don’t need to but interestingly enough I’m not a Costco guy because we don’t have one local to us but I might become one.
speaker-0 (36:19)
Yeah, I don’t know. Interesting. I can start getting those Kirkland signature balls. Make sure it’s the right version. That’s really good.
speaker-1 (36:25)
But so that that Costco is going to be pulled part of a mixed use area here in the Reading, Pennsylvania area where they’re supposed to have something like six or 700 rental units and the the build to rent space looks interesting. ⁓ In the future, we definitely need more housing. We need this is where I in full agreement with the administration. We need.
quicker regulation or less regulation on where you can build. And I don’t mean in like floodplains and things like that. You don’t want to build there. ⁓
speaker-0 (37:00)
But we shouldn’t have to wait 12 months for a permit.
speaker-1 (37:04)
Let’s put and maybe maybe it’s technology that actually pushes this forward and helps the whole permitting process and bring it down, you know by half or three quarters to get that through builders would love it. ⁓ It would make financing a little bit easier because you wouldn’t have to go through this whole process of waiting for it. ⁓ They could tell you right away and I don’t mean an individual.
speaker-0 (37:25)
If only
we knew a guy who understood real estate and building, who could really step in and help us through this.
speaker-1 (37:33)
Yeah, I wonder
who do you think that would be?
speaker-0 (37:36)
I don’t know. There’s got to be someone. Yeah.
speaker-1 (37:39)
⁓ but so build to rent homes, I think are going to be significantly bigger in the future than they are now, but we need more housing across the board. ⁓
speaker-0 (37:50)
You see coming out 76 the whole way out of Philadelphia, it’s going farther and farther all the way out to like Coatesville now, where it’s just massive built rental things where you have, you know, 150 units and they’re nice. They’re new. Yeah. Not a place to live. Probably expensive, but not a bad place.
speaker-1 (38:08)
You brought up the term pike, is 76 here locally. I don’t know if you noticed. Did you realize that they took down all of the toll booths?
speaker-0 (38:17)
Not until you mentioned and we went to that Sixers game. Yeah, I was just like, Oh yeah, where’d it go?
speaker-1 (38:22)
Yeah, so King of Prussia was this massive toll booth like 10 or 11 booths on on either side of it. Yeah, it could have been more giant toll booths. But most all of the toll booths here in Pennsylvania have been removed from the turnpike, which is nutty. And you know, it’s all technology based. And you you know, give it 10 or 15 years. And you’ll be talking to new drivers and you’ll talk about when we had a person
speaker-0 (38:40)
Yeah.
speaker-1 (38:52)
sitting in a toll booth collecting money from you with cash or something like that and they’re just going to look at you like you had three heads. And so
speaker-0 (38:59)
Yeah, right.
Insurance is probably happy with that people won’t hit them and that’s probably a very high risk job. The insurance for those employees is probably a lot because they have to walk between the stalls, you know.
speaker-1 (39:12)
And
no question about it. But therein lies one of the rubs is right, you think, well, ⁓ technology going to take all the jobs away. I personally don’t think that’s the case. I think technology is going to help productivity. But I don’t think it’s going to take all the jobs away. But who you know, I’m going to grow up and I’m going to be a toll booth collector. I mean, that’s not a thing. Yeah. Right. Yeah.
speaker-0 (39:34)
necessity.
Who knows you could be really friendly and you have 30 seconds to interact with someone and you just thrive off that if like Mr. I could see long fellow deeds enjoying that job.
speaker-1 (39:42)
I waited 30 seconds for a toll.
I
mean, those are the jobs that are ripe for disillusioned, disbandment. That’s the word I’m looking for. Disappear. I mean, they totally are. There’s no reason that we should have a person sitting in a toll booth. Yeah, it doesn’t make any sense. So that leads me to another thing, which is the we’re scheduled 2026 looks like the first year that we’re going to have a net loss on immigration.
speaker-0 (39:59)
pre-automated and distributed.
speaker-1 (40:20)
So historically speaking, we’ve had roughly two and a half to three million net positive people coming into the United States. 2026 looks like it’s again, first year in a long time. That could be a net loss. And then you think.
speaker-0 (40:35)
to get those flows or people just going to stand put.
speaker-1 (40:38)
You know that I don’t I’m not smart enough to know that answer. I don’t think Central Americans are going to wind up going to Europe. I that doesn’t make any sense. ⁓ But if there are jobs that are menial jobs that are being replaced by artificial intelligence or robots ⁓ and we are having less people come in I mean one could make a case that those two things align with each other and are parallel to.
Okay, maybe we’re going to have less job growth, but we’re also going to have less people growth. Now, I think less people growth in the end is probably a net negative for GDP over time. There would be economists that would argue that, the productivity gains are going to help GDP. And so they’ll still grow, but they GDP may not grow as much. And if you look at a country that has had almost net zero immigration for a long period of time,
Japan. Yeah, exactly. Right. And replacement rates, very, very low there. I mean, they had a 30 year period where GDP was really tough to come by the GDP growth, I should say it was really tough to come by. ⁓ You know, so we hopefully that that’s not in our future. But I’m not necessarily opposed to having slower jobs if there is net, ⁓ significantly net less immigration.
speaker-0 (42:01)
Right.
speaker-1 (42:02)
I think in the end, that’s not necessarily the worst thing ever. And maybe it only happens for a year or two. Maybe it only happens in this administration. We have no idea how this whole thing is going to play out. But right at the moment.
speaker-0 (42:14)
So are we going to get wage growth at a higher rate? So we have productivity that should move up with automation and we have less immigration. Do we think we’ll get some wage growth again where we can start outpacing inflation? I mean, we are right now. We’re outpacing inflation for the last couple of years.
speaker-1 (42:32)
If you think about the jobs that are going to be automated and you think about the jobs that people don’t want to do, you tend to think about a low-wage ⁓ position that could be filled by a temporary worker, whether that’s a visa worker in the case of ⁓ agricultural industry or whether that is somebody that is here. ⁓
speaker-0 (42:58)
10 extra customer service people that you have to train up and have to be all on the same page. You could get a really, really good chat bot eventually that can just sort of.
speaker-1 (43:06)
I don’t know about the chat bot. My thought process was if if there are if those people aren’t here to fill it and you have to fill it, you’re going to have you’re going to have wage inflation in the sense that you’re not going to be able to get people to do it at the rate that those other people were able to do it. And that to me seems like wage inflation would would have to happen.
speaker-0 (43:28)
Yeah, right.
speaker-1 (43:30)
I mean, 10 bucks an hour, $15 an hour, that’s not going to cut it on a lot of those jobs that people don’t want to do.
speaker-0 (43:35)
Yeah, I agree with that.
speaker-1 (43:38)
I certainly don’t want to do it. So yeah, no, no side hustles for me. ⁓ What else you got?
speaker-0 (43:40)
Sightless.
on everything.
speaker-1 (43:48)
I just wanna go back to we were here two weeks ago and we were talking about the Golden Globes and then a few week and a half ago we got the Oscar nominations. So we’ve been trying to catch up on some of those. Have you seen any of the nominated movies? Okay, so we’ve watched two in the last few weeks, ⁓ one battle after another and then Sinners. And I think they’re both quality. I can see why they would be nominated. It would be something for people to watch.
totally different movies. One is kind of a yeah, definitely a little bit of vampire, a little bit of zombie, not so much scary, but interesting, interesting to watch. And one is more of a Leo epic about a long lost daughter and immigration and Sean Penn’s in it. He kills it. You see him pop up in some random stuff. And this was one of those rant random things that he’s in. He was awesome.
speaker-0 (44:21)
vampire.
speaker-1 (44:46)
I’d recommend it. But the other ones out there, know, Marty Supreme, we’re going to try to see that Frankenstein, begonia, train dreams, hamnet, sentimental value. They’re all there. And our goal is to try to watch them all if we can.
speaker-0 (45:00)
⁓ so we’re going to Disney next week and we’ve been trying to get the kids up because Livy like wants to watch two movies. That’s all just on repeat. We’ve seen frozen. We’ve seen lion King about probably 40,000 times, three, four times a day. Seriously. It’s a, it’s, it’s something. So we tried to expand their Disney horizons and we’ve been picking new movies and Lex and I got into one movie. I’ve, I had never heard of it until we were looking at the rides tomorrow. And I thought it was an interesting concept.
Not a great movie, not a 90 out of 100 or anything like that, but ⁓ kept me entertained. it’s it’s light. It’s a kids show. It’s like PG 13, but it was good. Okay. ⁓ land man just ended. It was a really good final episode in land man. And then we were excited for nights of the seven kingdoms, the game of throne spin off between house, the dragon game of thrones in terms of the timeline. But that’s been kind of strange so far.
speaker-1 (45:58)
You know what else we watched and I’m going to wrap up on this. Save Bert.
speaker-0 (46:03)
Save Bird. What? don’t know what. ⁓
speaker-1 (46:06)
for pressure. He
had a six, ⁓ six episode series that came out called Save Bert. It is really funny. Some people like it, some people won’t but
speaker-0 (46:18)
I have
one more serious thing before we go in there. What’s that? Everybody’s game been worked up on gold and silver, you know, play them all, all the commodities. And you have some people saying super commodity cycle, all these things, which I think are valid. think there’s debasement issues, which are valid concerns, uh, with debt piling up and spending piling up. Um, you also have supply issues on a lot of things like silver. You see that popping and gold going parabolic.
So in the long term, I think the basement trade is a real thing and will probably work out and supply issues and demand increases are legit. But boy, they’ve gone parabolic. were talking about even on a logarithmic chart, like it’s parabolic. It cannot be contained. I’m scared. I would be scared to dip my toe in, like the silver gold right now, unless I was holding for like three,
speaker-1 (47:10)
I mean, even if you are, you may make it out alive on something like that.
speaker-0 (47:13)
Yeah,
it’s scary how how quick and strong it’s moved has been great. We have a couple of miners. Yeah, in our individual equity names, but it’s wild. Yeah, it’s been exciting.
speaker-1 (47:25)
count on staying at the price it is today for any extended period. ⁓
speaker-0 (47:29)
Silver just had a
wild candle. It was up 14%. I think it was Monday. Was it Tuesday or Monday? This whole snow day we had with snowmageddon has me all messed up, but it was up 14 % and then went all the way back red on the day. It was a real ugly candle. I’m like, maybe this is the exhaustion. Maybe we’ll see yourself, but it’s been all right the last two days or last day.
speaker-1 (47:52)
I’m not sure that they can stay as elevated they’ve been. Maybe they just need a little bit of cooling off. Little bit cooling off. I think everybody needs a little bit of cooling off after the whole storm. Maybe cooling off is not the right way. I hope everybody got through it okay. We did some shoveling, some snow blowing. There’s a little bit of ice, but we got through it.
speaker-0 (47:57)
Yeah.
I need a hot tub after that.
My snow blower didn’t work. Didn’t start up for me. It was awful.
speaker-1 (48:19)
You gotta
check that stuff before the snowstorm,
speaker-0 (48:23)
I meant to, had to fix something on it, which I took like an hour to fix. So I didn’t put gas in it intentionally. And then after it took an hour, I thought it was going to take 20 minutes. was just like, I’m done. I’m going to get dinner, went inside and didn’t go back out and check to see if it worked. already put an hour into it. I was just like, it better work. it didn’t.
speaker-1 (48:40)
All right, well there you have it. Check your snow blower before the storm people. for everybody at good life. I’m no Brooks with me, Chris needs have a wonderful, few weeks. We will see you Valentine’s day. Thanks everybody.
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Disclaimer
The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you consult the appropriate qualified professional prior to making a decision. Economic forecast set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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