The PlanStrong Financial Forum 09-23-17

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Sunday, September 24th
00:53:28

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Now. From those plans stroll in the broadcast studios he would still play and strong financial forum where you're hosed. Jim are very humbled president Roh plans strong investment minimum. Hold portions there's still I'm Bruce Morton investing. Some deals on. And I'm Jan. Abbreviated list along with the ball Parsons welcome back it's a plan strong financial forum. And call it says here we are it's it's it's the middle of September the last weekend of the stylish. This is officially. Oh he's so low blow the thing it doesn't really bite you right up. It's over I'm now. And basically would have been saying goodbye to summer since the end of August bullets but but now the calendar agrees on the calendar is telling us to say you're right into your you know summer. You don't people often it it has to do what we do here in this program returner both finest people. You know the old shell may go wade thing though that some folks still say our program but he is I don't know if there's a little birdies early but just did people do sometimes put things in the back burner reserves are summer yeah if they don't go away and forget it the German born nine burns and get that September forget that in the fall. You know it's time now he does is it here we are before you know it's in its October. This is certainly a time when people need to be looking at their portfolios so before we begin the show I just former mine pollution and toll free number. EDD 9727526. Or these usually school online to plans strong dot com to get in touch with Paul. Fall has really begun. Things happening whether it's crazy stuff like another hurricane embrace ordered the fact that despite the fact that the folks and TVQ screaming about it. We keep hitting record highs in the markets that's right so things Japanese car. Things are happening and good things are happening and it's funny because you have to separate the wheat from the chase fan and I we sit and watch I watch in our region and watch an awful lot and I have to tell Irish on people get people make. Money in the media by telling bad stories and you know most people don't sit around and licences of furor about something good date and it's it's no different than almost anything else that's bad news you tend to listen a lot more -- especially when a guard to the downside it's human nature and I think that's what we see an awful lot of you know with people's investing as well and and with investing stories I can't tell you how many times. A that the subject matter on some eighty show suspend K are we at the top on in our or is this the beginning of the and what's happened snacks permanent and IE actually -- sat in on not one but two very good conferences this week and got some really good information on that I have to tell you one of the best insight and give you just right off the bat is that the Fed came out and announced this week that there are not unwind their balance sheet they were going to sell a bunch of the bonds that they bought. When things were bad. In the United States back in 20082009. And they started to quantitative easing in May were called to three versions. I and they bought a total of almost four trillion dollars of both US treasuries and US mortgage backed securities and they did that to drive the price up of those bonds as a result that obviously made interest rates go down. They wanted interest rates to be nice and well I'm so that businesses could borrow what ultra low rates to try to stimulate the economy while. If they're doing the opposite of that now which is they're they're trying to actually normalize. Interest rates are trying to go back to as if they didn't do that they're trying to do it in a slow measured fashion but in the end they're trying to do that they're trying to do that because they believe that the economy is solid enough and if it's solid enough. That's for one thing we're told me that hey you were not the end of this thing thread would not be if you will tightening other normalize in the not tightening but there their lending rates they want rates to go up a bit now run at least one full percent over the next year or so if that's the case you don't raise rates when you think things are about to go down the jumper and so if if you can look at anything else look at that as an investor and again you know eat nothing can. Past performance doesn't carry chief future results but the Fed I think is very very aware of mistakes that have been made in the past by other fats and how they have cost. Up prematurely. On you know economic slowdowns to occur and if anything they're very aware of that and there are still starting to tighten up now I think that's a good sign for its fair assessment. Of where this economy really does. Coming up in the program little later on Paul we have some interesting ideas you're going to share with us and you're also to ensure this in overall economic and market our old look from JPMorgan Chase yeah. So we thought we were a lot maravent that don't throw those guys called retirement. Doctor David Kelly from JPMorgan Chase I think there's a very good job not just talking about the markets but he does a really good job on the economic outlook and and I guess your eyes are blazing over right now this is important stuff I mean this is the stuff that really if you asked somebody are you bullish or bearish. Argument. Even if you're bullish if you really thinks things are gonna be good. And you rip you better have a very good foundation for believing that the economy is on firm ground firm footing and it's going to continue to be on firm ground and firm footing and I wanna talk through some of the things that we covered in that conference because again I think it's good ammo for for US you go to bed at night to say at Charlotte still be in the market how much should they be in the market should I be overweight underweight in neutral position why. This is the kind of stuff that really helps set that whole environment. That's coming a little later in the program before we do that ball let's look at what happened over this last week we'll start with the US stocks again it was a it was a pretty good week and an I should say that and I say it's somewhat tongue in cheek because several indices hit all time highs and record highs I mean it's so funny you don't sure that a nice you know on. Any other shows you certainly don't Europe on the new store I Newser don't actually not that they don't save Haiti. Great knew it was there was another. You know topping you know I'm market can you imagine how great is us you don't hear that. This is some day people will step back and look at what is happening here and and they'll say to us who lived through it. Boy people must have been jumping up and down for joy right we're not really break it divides the recap Pitt hitting highs we hear people saying. All or oral another high for the focus is all about misery in Puerto Rico I'll write more you know one of the other. No pork places that Scott had fire hurricane or you know something else that again as I said there's there's seems to be a real focus on the negative and frankly I think that's good for us because it oh it'll it means that weakened by eight. Us stocks at reasonable prices and and by other securities at reasonable prices because he's the negative this being in my opinion over emphasized certainly they're not emphasizing. Stuff like you know I don't know how many weeks in a row it's been Kenny but I feel like every week for last bunch of weeks I said we are nothing new here we've had a hurricane hit some place and were we should all time highs and one or several of the major auto market in the season United States. And you know those two don't generally go hand in hand and aren't you we are hurricane you might think oh right perhaps the markets will take a step back because they're afraid of what might happen bit. Despite the bad weather right we've seen those markets continued to soar. That's correct and so let's talk a little or what happened in the market that does stocks were up modestly this week they they checked out of debt arm but they did reached new highs again. And international stocks were also up a little bit this week just to give you an idea of how good you should feel about things overall year to date if you been invested. In the US stock market or international stock markets the IDS and 500 which is an index of 500 of the largest publicly traded stocks in the United States that's up about 12%. Excluding dividends up 13%. Are including dividends and we are we're about nine months of the way through -- your wish three quarters of the way through the year 13%. For true you know three quarters a year that's better than last year last year 2016 don't forget yes and he made just under 12% and were last year was considered a very good year I I didn't have any of our clients really being upset what I call the 12% type in turn in writing S&P 500 and international stocks last year international stocks only made 4%. This year international stocks are up over 20% a year to date age an issue which part of that is because again of of kind of that the calming. Of what's going on especially in Europe. I think that the real concern. And there was heightened concern about what was gonna happen in Europe politically after the break it vote last year. And I think there was a real concern that trump one in the United States that was seen as a very much outlaw are people didn't expect myself included. Hot and then you know there were additional up elections that we're gonna happen overseas. I'm starting with on the French and date a did not elect a populist they reverted back to electing more from mainstream candidate and you could say that the same is likely true going to be out within -- Italy as well the reason for that is even if they aren't from a mainstream party. The five star movement who has gained a lot of popularity. Went -- by the way either I think he's either 29 or 31 years old believe our party right now. But. They've gained popularity by prohibiting. From being the party of leaving. The European Union saying -- -- no we're using that as a leverage pointed to negotiate. With the European Union so that we get better terms with them and we actually wanna stay within European Union that kind of rhetoric is very much calmed down concern and volatility. With our international markets and then we're seeing some other data from around the world it's good to we're seeing emerging markets are looking better and better as a result of commodity prices coming back up after being down for Europe to some other things so. Overall it's it's been a pretty darn good year kind of across the board the only place that hasn't had just a terrific year is bonds yeah you know I mean it at that. Both star a bold stocks weather there international stocks or US stocks domestic stocks have significantly. Outperform bonds from what bonds have also generated a positive return at the same time high quality bonds have and junk concept of what we seamless high quality ones this week. While high quality bonds this week actually so other prices just go down a little bit site yields go up just a little bit and right now the tenure US treasury is yielding about 2.2 6%. It's still below where we started the year I mean think about that's amazing and the German bond. Crept up marginally to about point 45%. The Japanese tenure continues to be flat right around zero just north of zero and cures the big news the probability of a point 25% short term interest rate increase in the United States. It increased. To 73%. In the December timeframe that's up from 53%. Last week real big change that's because of what happened at the Fed all talk about that when we come back. That's when we return to supply and strong credential for. This is all Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what need to take a look at your investments and retirement plan called my office. 808897275260. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can see classroom investment management is an affiliate of mismanagement grouping is located in Washington street domestically and say. Hi this is Avi Nelson. People use different strategies to acquire enough money for retirement some try to do it themselves. Others buy insurance or investment products though sometimes will benefit the seller more than the buyer what makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to acting your best interest. And be paid the same amount the matter watcher invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment that's 888972. Plan. Or visit planned strong dot com. Securities and investment advisory services offered through next financial group linked member former SIPC plans to investment management is not an affiliate of next financial grouping and is located at ninety to Washington street. Okay. It's. It's. But I'm strong broadcast studios and the epicenter of journalism's. This is the plan's strong financial forum where all portions president of planned stronger investment management. And I can occur every year or does go on with ballpark since it is the plan's strong financial for a man before the break all promises he talked to us about the Fed is this really is can the big news of the week it was it's so so so what are they sent. So there there were a lot of surprises. In this announcement it it's Jackie Allen came out on Wednesday after the at a two day meeting regularly scheduled two day meeting. And what they did was two things first of all they left interest rates where they work. So between that our term interest rates to train one and one quarter I was expecting are expected. And the second thing was that they said that they were going to unwind quantitative easing in the restart in October and this was announced. Odd kind of bled out there are a little bit in the June time for Brian but again what they're doing is they're telegraphing well in advance when they wanted to do something and unless conditions change materially. Then they go ahead and they do what they do is also watch to see what the reaction is that the marketplace. When they bleed out an idea early and as you may or call markets didn't move much in July August. Because even after hearing that the Fed intended to normalize interest rates in other words finally I get some of the bonds back into the marketplace that they had bought during the quantitative easing program. And so. Are what they're gonna do is they are gonna start unloading about ten billion dollars a month and that's gonna start. Ian October. And eventually build that up to fifty billion dollars per month that they're gonna be shelling back into the marketplace. And what they're gonna make that is three deaths will be. Treasurys and two fifths will be mortgage backed securities as they sell them back into the marketplace. What does it mean. Probably raise interest rates a little and a wide because if you're shelling a bunch of anything into a marketplace tends to drive the price down. And if you drive the price stock as you have excess quantities of that. Then in the case of bonds if you're more room in the marketplace and in order to be able to sell them you have to raise interest rates to be able to make them attractive smells we expect to happen we expect to see eight normalization. Of interest rates to the tune of about. 1% ourselves up over the next year or so and let me just give you some of their projections. Are there there updated short term interest rate projection includes one more 25 basis point increase this year and three more next year so we would and this year around one point 4%. Wheat and our next year at around two point 1%. And wheat and 2019. And about two point 7% and for short term interest rates and I have to tell you if you world long suffering money market investor that's music to be sure graders you know I mean if we end this year one point four and we double that in two years' time. You actually don't mind putting some of your money in a money market at that point or right but until and unless and until that occurs. Even or one for its. Not a whole lot are charged grow. I call you mentally short term aren't there boom that affect long term it will and and the reason for that is because as you sell these increasing amounts of intermediate and longer term treasuries and also mortgage backed security. Against same thing's gonna happen we would expect to see those interest rates go up well and they're thinking kind of along the lines again of maybe 1% higher now. A verses from where we are today another thing that they do was they also updated their forecast for GDP growth and they projected it to be a bit stronger this year than they had in prior estimates are now saying the GDP growth in 2017. Expected to about 2.4 percent. But van going down to two point one and eventually 2% between 222090. Actually think. That that's all done under the hospice of no tax cut tomorrow I believe that with the tax cut that you will see GDP growth that will be in excess of those numbers. The other thing and they talked about that a lot of eyes were on was inflation are still a concern that we don't have that much inflation in the United States and right now it's running at below 2% and they said they expected it to be around one and a half percent this year working its way up to about one point 9%. And eventually 2% inflation over the next two or three years. So it's gonna be lower than it's been in the past and and that's another important part of their forecast why because it says. Again if you buy a longer term bond you're really buying that bond to keep up we've inflation. And so it's a really good indicator of what you might see for longer term interest rates to be if interest if inflation is only gonna go up say half a percent 2% from where it is today and may be longer term bonds don't increase a whole lot more than that as well over the long term. Our poll or more oil we did see much movement there you're right can oil prices were flat this week around fifty dollars a barrel for west taxes around fifty cents a barrel for Brent. And yeah we had yet another week of US crude oil inventories increasing. This is the third week in a row that we seen not why because what happened in in Texas hurricane Harvey that you continue to produce oil but being able to refine it is very limited in the United States right now as we try to get or finery is a back up and online in those are areas impacted especially towards the Houston area second largest refinery area in the United States that's why we have access oil building up on our inventories right now and the dollar was flat it was the dollar didn't do much seat flat against the Euro it's about a dollar nineteen it weakened against the Japanese yen to about a 112. And it also weakened slightly against the peso and the Mexican peso to about seventeen point seven that's still about 3% below. How we're trump. That that what it was the level it was at when trump was elected president. And Paul not a lot of government data a couple of number mostly had pretty good movies we should know about here you know housing starts were just on her other targets that they hoped they'd be around one point two million on an annualized basis but permits were good they were around one point three million. Just to put this in perspective the dark days. Of the recession this number was half a million or 600000. Houses were being started. At that time at the very height of the housing boom when we have ridiculous mortgage policies the United States that number was around two Millie Perkins in okay work around a million to a 1000003. Again it feels like goldilocks you know not so little luck too much just about right I would say that's pretty true. What are also says this data shows is that housing starts looked like there were only temporarily impacted by the impact of our hurricane Harvey on Texas and what about existing home sales so I just talked about housing starts that's for new houses existing home sales Lois houses are built and they're being resold. Those were a bit light also around just under five point four million Armani annualized basis and again that's thanks to the effects of hurricane Harvey on Texas we have been and seen what it's gonna do just Florida yeah I would expect that that also impacted simply because you know if you have a hurricane blowing through you don't tend to go out looking to buy a new home at that -- or existing home at that point and and housing starts were also down in August vs July and there are only up there barely. Any growth verses were they were a year ago. Always like to follow the initial jobless claims number are we did have some movement there yes it is so remember we had a couple of blips. Where we had been in the 230 to forty range and and Janet jumped up to 29 295. And that was because of the impact of hurricane Harvey and eventually hurricane Irma. And what we're seeing is our after a couple of blips it's already come down to about 260000. This past week so we're already seeing it normalize come back to that really low level but below 250 level that we really like to see that really shows in my opinion pretty close to full employment and that's kind of where war were Barack two on the impact of hurricanes has certainly been somewhat temporary. Paul last week's program we talked quite a bit about apple and their new product release out and you don't throw. One product that you really liked was they're new to the apple watch series three ask you you thought this was really science. Not alone I don't I'm not alone there are a lot of people who are very excited to try this product because it's it's truly did Dick Tracy -- -- Bruno you're finally at the point where you don't have to have any kind of a larger mobile device in your pocket with us this connects directly to the LTE network. And it allows you to take phone calls to actually get a text messages as well as to hold music mod that you'd like to listen to see you can actually be held on your paddle board. With this on your wrist and you don't -- it by the way it's also water resistant to fifty meters short and so -- -- going down below that you're probably not feeling -- anywhere -- apple watches the least of your -- -- com and and its -- it's something he can really do -- a lot of athletic things are a lot of things outdoors and -- -- lot of your needs but they had are a blip on the screen when. And Apple's stock was down a couple of percent on the news and now was because. Big confirmed that the new watch has problems connecting to a cellular network in certain circumstances. And cure the problem really arises. When the watch join -- on authenticated. Wi-Fi networks that -- connected or -- port connections. To the Internet so take it this way caddie whenever you're you take your phone and you go from opt out outdoors and you come inside and -- home where you're Wi-Fi is your phone goes automatically. Tour to go from. You know the LTE net -- the cellular data network to your wife -- -- -- term why -- save money you have to go through your -- -- -- Shia and -- that the watch tries to do the same thing -- the bad news is though sometimes it connects -- -- -- -- Wi-Fi network that he doesn't have good connectivity. Back to the Internet and they need to fix that now the good news is this is a software -- is not a hardware fix -- the watch and it's something that they're gonna probably be able to -- quite quickly just like our cost a lot defects. But the stock did drop a couple of percent on the news for already started to recover by. Overall I just don't think this is gonna have a meaningful impact from. On longer term sales for the product especially. If it does have good connectivity eventually to the LTE network in the end that's what people looking for I think they're gonna forgiveness as long as it doesn't become a bigger problem. Always come back we have another quick story of the road apple is well as more and Equifax which we discussed last week. That's when we returned to play a strong financial for this as. All Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what media take a look at your investments and retirement plan called my office of 808897275260. That's 888972. Plan. Securities and investment advisory services offered through an extra two groupings like number two and as I can sequester investment management is an affiliate business financial grouping is located in Washington street in Massachusetts. Hi this is on he Nelson if you're fifty or older here's a suggestion. Commit to getting your financial house in order over the years you worked hard took chances made sacrifices. And built up as much wealth as possible so you'd never run out of money in retirement. Well. Now it's time to get organized and to make sure you have a financial plan. Who protect your retirement. Rich your financial life together. Call Paul Parsons had planned strong investment management. A schedule financial checkup call 8889727526. That's 888972. Plan commit to getting your financial house in order. Call 888972. Plan or vision plans strong dot com. Securities and investment advisory services offered through next financial group in member tumor SIPC plans for investment management of our affiliate that next night. Okay I'm leaving yeah I don't know. Says financial talk then veered signing and informative. At least it's informative it's Glenn strong financial forum where bowl portions president's bold plans stronger investment management. Duncan Currie at the anchor desk along with the ball Parsons classrooms financial reform calls toll free number 88897275268. DD 972 plan. Or go online to plan strong dot com and as we discussed. During this summer's over officially the calendar agrees now is not just our feeling although pretty nice weather this and you are right I get a little talks a summer so we we can really enjoy the guys whether I was you know it does it's nearing the end it is so what this would definitely be a good time those things that you put on the back burner through the summer. It's time to call ball Sid don't fall and his team. And get a no obligation portfolio review 889727526. Or online at plans strong dot com. Hey Kenny I don't want they wanted to mention before going to that other story about apple is that we're in the process of updating our website Murrow brand new website it's a look great pomp and one of the things that we haven't theirs is a section called the plan's strong advantage. And it I've been listening to commercials lately on the radio on and enough people around talking about all different kinds of attributes of their particular businesses have sure what they're focusing on. But. When we talk about. And identity for a business. Were investment managers first and that's something that's really important for people to understand that then we believe that act plans drawn that. If you don't have a good investment management. Op process and you don't and you don't manage money as your number one priority. You can have. All of the plans in the world are all of you know all the other accessories that are important to do. On but without a good engine. On it's just a bunch of good looking paper. In the end you need an engine that powers the whole plan that literally delivers. Defending actual results to make all the rest of that stuff work. And we do all of our investment management in hoax we do ourselves we don't outsource it to anybody. We make all the investment choices ourselves. And our clients' values. Are and so when you listen to the show and you say. OK I hear these guys that I guess at what they're saying make sense but how are excellent Herrnstein diss guys and a whole multitude of others on the radio that's part of organ or dress and our new website and one of the things is we call the plan's strong advantage and one of them as we are investment managers first that doesn't mean that we don't do fully integrated. Financial plans it doesn't mean that we don't assist with all kinds of other services for our clients we do. But in the end it's kind of in the way I think about it is. I would never wanna buy a Ferrari. The had a VW went OK right because you can look great but it just doesn't get the job done right you need if you don't build around a good engine and the rest of the slots monitor how good it looks it just doesn't get the job done and as a result. We spent a lot of time really focusing. On investment management and we do ourselves that's a huge differentiator between us and and a lot of other people out there are here and we think it's by far and away the most important thing because it's no different than saying you know the guy has really good hair it's too bad his heart doesn't work right right. You're pretty good hairs are gonna help you much if your debt are OK you've got to have a good heart the same thing is true the financial plan if you don't have a good engine if you don't have a good investment strategy and if you're a good selections being made on your behalf for strong investment management. You're you're just knock it succeeds she is knock her go. So once again if you like to experience a blast right advantage in the Ferrari engine that is plans drug. Can call to all 380 89727526. Or online at planned strong dot com. But so we mentioned all the last segment apple Lou in talking of course we talk a lot about apple with good reason. It's a large cap stocks in the United States good and that's probably good reasons android is now are there. But you'd you would meant anybody who doesn't own Apple Stock either directly or indirectly in their portfolios have been very good question although I have to believe that you know of all the investing public out there it's gotta be it a massive proportion works and so act. It's absolutely belongs in a lot of conversations. So this conversation those above the chips that apple puts in their telephone rang export act right so as as we can see it for small as you were called a year ago we do this terrific our conference call the future of every bride. And in it we talked about where things were going and how were really moving to this mobile technology and you know it never really hit me when people were calling a mobile devices until. Calm at some point my iPhone did a lot more than it used to deal children and all of a sudden it wasn't a phone if anything it wasn't an. It was no longer a phone it was an I device it's barely a faux news or early and it's up the phone is the rule book kind of the ancillary part of what you use it for in fact. I was on a facetime call with a web developer rocked several times today I'm in South America. I'm you know and and you know it's just stunning how the technology has gone along whether it's texting or that or summoning a car with who were young to be going to one in this week. I'll be using my over how sure are and summoning a car uranium you know 2000 miles from Allman. There're there you go works and it and it's just amazing what it does so it's so much more than a phone at this point of fact as I set off the phone is the least of that but having said that all of that functionality. Requires. A whole bunch of things including. Better chips it it requires much faster processors. And it in in it also involves bigger and better chips are chips that can operate faster and with these latest iphones and that have been released. They have a sizable boost in memory and storage over previous iPhone iterations. Thanks by the way to demands of those duo processors. A long by the way with Apple's meet their business need to sell more content and services per device you're right I wanna sell more to stop. Yeah and in order to sell less stuff that's got to be able to run on something and when it runs on it needs to be able to consume memory. And it needs to be able to have storage. So it's you know it's also when their own best interest to make sure these things have this just to give you an idea. The amount of storage in the iPhone seven. On the base model is twice the amount of storage on the iPhone sex and so 64 gigabytes. Vs 32 gigabytes of music about a gigabyte it's just so much space and to think that that's on your phone it's just stunning. And on memory it's now gone from one and not a one mega were a sorry one gigabyte of G ram to three gigabytes of why are aware bring this up. Because if you're gonna sell a lot more this stuff a lot more of these iphones with a lot more this capability. Or need a lot more chips. You need more memory chips and you're gonna need more gearing up germs and and who makes house may be an interesting thing to look into is saying. Well Samsung we all know to us bright and and they are certainly one of the leaders but there are others as well including micron and Toshiba. Those are also well known. And again you have to look at them and say are there are advantages that that one has vs another vs Samsung. 46 gonna do well in which markets and is there a possible investment opportunities there. Why dory bring it up because demand is outstripping supply at this point home you know if you think apple demands a lot of of our memory and storage just let's just talk memory for a minute. On odd the newest devices for Samsung and LG they actually use six gigabytes of deer. Okay think and status is an immense amount and so will all of those devices plus the apple devices what's happening. Chips are becoming scarce want anything becomes scarce what happens price pretend I was up at set. And what does that do for returns of those that make that stuff in graduation Gary you've got veterans so. That's why this is certainly something to watch as we become more and more connected with more and more functionality of these mobile devices you have to look. At some of these chips whether their memory church restore chips is being very very important and how we take it match up. Well lest we have we also to argument Equifax and it's been another week what does it look like now are they going to be okay. It's a really good question can the dish the answer is the jury's out but there have been several odd discussion articles on August and what they've said is it could go one of two ways now for those of you who aren't familiar with the Equifax situation. There was a data breach here and they did she went to save data breaches like saying the Titanic surprise only hit her okay sure there was a massive data breach happened to the tune of our data for a 143. Million Americans including name address Social Security numbers all kinds of bad stuff these guys got hold up and and as a result it's really a gonna be a problem for them to kind of shore up their credibility and and I a couple of articles that came out this week so first of all several analysts came out and and some of them said hey we think they're gonna recover there's gonna be a while one time cost associated with us thanks but we think they're going to be okay and Don you know that they are dressing yet they're fixing the hole this is just gonna be no overtime. This'll be a large one time cost but it's not gonna sinks the ship a few well. There are others though. But really wonder if this is gonna be a lot more likes a company that you may not or call us called choice point. This is indeed it aggregation company I in 2008. That had a large data breach I wasn't nearly as large as the Equifax front runner was big enough that people got a hold. Of important information. Associated with a bunch consumers I think Ezra 141000. People really subjected them to identity for him. And what happened in the case of choice point was. Dare stock price went down so significantly that there were ultimately bought. And there were bought at a significant discount to where they had been trading and so the question is will this be. More as something like a choice point where there bought at a significantly. Low price. Or will be more like SMP think about what happened Standard and Poor's went on remember in 2013 the Department of Justice came out they said. Then 88 said that essence he had defrauded investors in mortgage backed securities and collateralized debt obligations. When they'd miss represented credit risks in those investments and there's a real question was will lessen peace survive image credibility as the name of the game for these really needs you right Bryant they did they really survive it was a temporary situation. They've turned it around and they got Barack oh all awful lot of their valuation. In any event what it means though is these guys are probably have a very big a bill to pay the very least and it could be. All the way up to maybe twenty billion dollars now this company only has a market cap of eleven billion. That could certainly do awful bad things here valuation for a don't know yet it's certainly the judge did jury's out it's interesting though the stock price has remained relatively strong. It's down a third of where it was pre crisis but it hasn't crashed more and if anything it's inched back up a little bit over the last couple weeks. Time will tell ball will we come back we have a good story about Intel. And also will hit on Tesla we always do it's a blast struck financial form this just. All Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WR KR plus news talk station. If you like what you hear on our show and what they need to take a look at your investments and retirement plan called my office at 80889727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can sequester investment management and filling in this country grouping that is located in Washington street domestically and six. Hi this is Bobby Nelson people use different strategies to acquire enough money for retirement some try to do it themselves. Others buy insurance for investment products though sometimes will benefit the seller more than the buyer what makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to act in your best interest. And be paid the same amount no matter what your invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment that's 888972. Plan. Or vision plan strong dot com. Securities and investment advisory services offered through next financial group and member Palmer SIPC plans to investment management does not definitely residential roofing and his we'll give you and I need to Washington street maps. Yeah ground zero for your financial news and economic commentary. This is the plan's strong financial forum where all the resumes president of home plans stronger investment management. And I get an armory in the anchor desk glow with all polls toll free number once again 8889727526. 88972. Plant or go online to plan strong dark common schedule and no obligation portfolio review. All we have covered a lot of information. And I know we always get the tassel. Let's attention story this week I'm not gonna tell you it's a we cover the Intel Nvidia story first OK okay we do that and this is incredibly important story again covered in our conference a year ago we talked about the future of everything we talked about where chips were going. And I wanted to talk about this because everybody knows who Intel sure you know do you everybody who ever had a PC which you know there are fewer fewer of us laugh and that's an analyst for symbolism here they had I remembered all of a sticker that said in talents filled everybody saw that they're right but Intel is desperately trying to not become yesterday's news and we've talked about that a year ago and continues to be the case. Right now. Intel's stock it generated a total return of 8% in 2016 yes. 5%. Year to date in 27 round verses twelve this year twelve or thirteen this year so. You know two thirds half of the performance that yes indeed overall. OK let's compare that to GPU. Chip maker Nvidia am well they hit an overall to their stock hit an all another all time high this past week after being up. 225%. In 2016. And 76%. Year to date in 2070 while those are slightly above just slightly yes and he did it and obviously they just completely overshadow that does the stock performance of the other Intel's. You know wanted to know Nvidia because they do of the a lot of video look at the US's other GPU is different from what Intel makes explained it is has so Intel makes logic based chips or CPU. What Nvidia does is makes GPUs or graphical processing units from Reggie bar day as you said they are different kind of chip on their used especially for graphics processor you're. Now Nvidia is. I just to give you an idea. Nvidia was very small a couple years ago right yeah Intel was massive here as okay. Nvidia is now to who urged the size of Intel might market cap can you imagine that. Now another analyst upgraded Nvidia's price forecast for the company saying that was less a traditional PC graphics chip vendor. And more a supplier. In to high end gaming. Enterprise graphics. Cloud computing accelerated. Computing. And automotive markets now other analysts have said they believe that the impact of big growing artificial intelligence market is still not fully represented mom reflected in current valuations. And that is just incredible because the sense that we get. Is there were only at the very beginning of what all becoming. A become a massive consumer market. For artificial intelligence technology. And Nvidia they've established themselves as the outright leader. Okay cell this is a huge market and there's another market with huge potential. That is the multi trillion dollar health care industry where artificial intelligence and deep learning is being used for couple things predictive analytics. Think about that broke right if you have certain set of circumstances does that mean that you're gonna become diabetic does it mean you may have heart attacks mean something right. Also image scanning. Scan and imagery and it goes and looks and instead of the radiologist. Looking at the slide and trying to hurt a squint and see if there's an abnormality. This has the ability to look. And just say oh I can see stuff that you can't even see we Xerox from that sounds pretty good right so image scanner and then of course pathology assessments. So again whether or. It's a radiology or anything else looking at slides of one sort or another and saying does this look normal dose of slope atypical what circumstance and it can be used to help diagnose problems this is a huge huge market. And I'm not saying that Nvidia doesn't have risks it some but you know one of them the biggest ones where she talked about a couple weeks ago and now was. If you will imitators coming in and and instead of producing these chips that can kind of do. Everything they're doing these special purpose chips that are really limited purpose they do one task and they do that one task well but they can't do anything else but by doing that. They can cut down the cost of lot so it doesn't mean that there isn't competition for Nvidia and they're not gonna have a tougher go to city as they go along but I have to tell you there seems to be an awful lot of runway left for where artificial intelligence is going the markets that Andy is going after and you have to say gee wonder is there are more upside for this stock I have to tell you the people Intel certainly hope there isn't what it looks like Nvidia has focused a certainly on the right marketplaces. And Paul we do like to cover a Tesla story every week because there seems to be always something going on their this one is not a positive story while I actually of two stories on OK okay and one is negative and one as Hamas or Syria and the negative one seems to be kind of the common one these days simply because the stock has done so well. Over the last couple years. That you know it's kind of died it it's gotten so high it's got to come down I'm not understand so well just this year yes it has that's right but. Let's just talk about this report that came out from Jefferies and analysts there this this week the predicted tassel stock would drop at least 25%. When their production fails to match their guidance to Wall Street associated. With a new model dreamed. And in the end some analysts believe that the current stock price is just too high to justify. The expecting cash flows and profits of the companies that's how. These futures stock prices are actually calculated by analysts and at the real vulnerability of the profitability. In the end is the cost of the darn batteries we've talked about that over and over again trek continues to be the case. But in addition to that there are some increasing competition being provided by some other providers as well so it's not just the cost. Of the batteries it's also the fact that you have other competitors that are recommend errant hassles not gonna be able to claim the entire thing I have. I have to type your Tesla you make a great product maybe you don't shutter that much with the idea that. That I GM is getting into the business. But you might shatter a bit more if BMW plus right now or you know some of the other companies that make you don't prestige cars that are very well built odd to have a real cult weight following disease only Tesla many people willing to pay a premium for him well that you know so there are others coming into this we know ball those are going to be doing as were a 100%. Going. Electric motor were only by their 2019. Model you can may have followers hero ball bull people who girl all the above you are absolutely right. And so that that is so all of those reasons are reasons why you might say geez Tesla has to do everything perfectly and if anything goes wrong at all then the stock price probably should come down. Having said that the stock price this past week hit 389 dollars a share an OK drive and and that was this past Monday it's up 75%. Year to date. And a week or two ago mosque announced plans Elon Musk was there that are ahead. Are to unveil its highly anticipated all electric Sammy truck ticket. So they're going to be huge eighteen Wheeler trucks that are electric power. That's going to be coming out on October 26 in their Hawthorne California facility. And think about this way when electric trucks come out. What happens beyond them behind that autonomous collector trucks right you're the number one employment is for Americans I at this point. Truck driving real do you think that might have a problem for truck armor yeah mania at. So I'm this is just that this is so darn important follow 'cause this can impact so many different businesses and frankly so many occupations. Employees said there was a positive story about Tesla other than the start price was not so on the positive side for electric cars there was some incredibly important news that came out of China this week. China has an official news agency and they indicated that the government will likely announce the future date. When the production of internal combustion engine vehicles will be big hand to watch in China whom you think that's important now yeah they have a billion people. Right a lot of them are driving cars and a lot more wanna get cars if you think well this is some fantasy land it's already happening in France and UK the authority and Nat announced that by 2040. You know their target is to not meek or or have on their roads knew him but internal combustion engine car Smart okay. And China's smoltz is especially important because Deborah real air pollution problem there I've been there I've seen it in a clear day thirty miles outside Beijing. Looks like a foggy day in downtown because the air pollution so bad so this isn't just about our electricity and and the idea of global warming this is actually for era pollution and for air pollution reasons there are a lot of people would argue against electric. Powered automobiles as being a nice solution for that. Here's the other reason why that's important China. Manufactures 28 million. Automobiles. A year. That is just cute the United States manufactures sixteen or seventeen million okay. Very very big difference and by the way only 20% of Chinese citizens only vehicle this point. So this is going to be really important but it's gonna be important to the Chinese manufacturers. Not necessarily to the hassles of the world. I would say good luck to Tesla getting more than a sliver of this Chinese markets I wouldn't try to play this would Tesla. In on the other hand I would look. To some of the Chinese electric car manufacturers from him as well as some of the commodity providers that that make the commodities that are so important to electric cars. That includes copper. Cobalt. And of course lithium. Balls to offer a number 88897275268. DD 972 plan. Or to schedule no obligation portfolio review your storm on to plans strong dot com to shoot me mill you're right back to you and Paul we had so many investing ideas to cover this week we didn't have time to get to the outlook from JPMorgan Chase. Promised we will get to that next week absolutely okay it's a well struck a credential for. This is tall Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what media take a look at. Your investments and retirement plan called my office at 808897275260. That's 888972. Plan. Securities and investment advisory services offered through an extra to prevent -- -- as I think sequestering investment management and filling them a special group thinks is located at any Russian diplomats who sit on strong investment management is located at 980 Washington street Dedham mass 0226. And can be reached at eighty 9727526. Political views may not reflect the views or opinions of next financial group the securities and investment advisory services offered through next financial group ranked number finreg SIPC -- investment management has not affiliate in its financial grouping this radio show is for informational purposes only and is not a solicitation recommendation that any particular investor should purchase or sell any particular security. The information contained herein is obtained from sources believed to be reliable and its accuracy and completeness or not guaranteed neater next financial groupings nor represented of provides talked about.
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