The PlanStrong Financial Forum 10-21-17

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Sunday, October 22nd
00:53:57

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Now. From the plan stroll in the broadcast studios he would still play and strong environmental forum will be your host. Kendra are very Campbell president Roh plans strong investment. Full portions it's time Bruce Morton investing. Symbian phone yeah. And I'm Genco. Arbor if you could just along with Paul Parsons and welcome to the plan's strong financial Foreman Paul you know it's a beautiful weekend in the fall we did some great weather. And once again we have seen some great things happened in the start market are I mean it's like we keep saying. Every week we had we needed new artists and make it happen again this week happened again this week. So again if you're one of those people listen to somebody's that how you know always sang all were all time highs and you better watch mode and all that let's not I'm not saying it isn't high intelligence fact I think it's incredibly prove to be watching. But that doesn't mean you watch from the sidelines it means you need to be aware. Of whatever the risks are out there. And decide based on those facts and circumstances whether or not you think it's still time to be at the punch bowl or pull away from the punch ball. Our assessment certainly going into this year was. Especially with the prospect of a tax cut and really nice our earnings forecast a first timer actually see earnings growth in the United States for the first three years. We said this is actually very good time to be after punch bowl we were very much interest and in being invested in night in stocks are at the beginning of this year and we continue to -- and as a result some you know people of benefited from not certainly got that investors who have been kinda have to trust us with their their investments we've got our our Franklin had a very very good year and we're thrilled for our clients sucks away your four. And yet it seems to allow this to voices are the ones saying. You at the sky is falling and we've been hearing that obviously for years NASA points this year in particular starting and it march April so. And just those few months are whom we've seen how. Much higher connect go now how many times did you hear that alarms for and you know that if it it it all of these platitudes that people come up with our you don't work until they don't you know invest and you know sell one may go away and down ninety we're missed out I mean it's here that like I said that another one is that this happens a year or would that in years then and seven tendon not be terribly Goodyear mean. I don't comes up. Stuff and that's not these are obviously people would wait too much time and her try to figure out ought to know relationships that our relationship there and they're just the happened to be occurred the same time but you know that the short answer is we had a very very good week and again here this week out they were up a bit early in the week to new record highs in the kind of backed off from the knee we're rebounder by the end of the week and a lot of that was because of new was. Armed that the senate had made a lot of progress on a budget and not as seen as the first step. Tourists are really getting high at president Trump's tax cut. And that as I said over and over on the show into our clients and elsewhere on the tax cut is catnip. I offer this economic expansion and when you allow people to keep more of their hard earned dollars to date ten to allocate that two but frankly better than the government to us time and day decide if they're gonna invest that they decide if they're Greenwich and that they decide what they're gonna do with that and and frankly what we expect deceit is better growth as a result of a tax cut and that's what the market is anticipating. It's it to act and a couple other things other things that are happening arm was that there was the framework for bipartisan deal on health care was talked about how the president refer city supported it but then later in the week said he wasn't so sure about that that's not a shock to me either. Armed that meant that there could be some better news as it relates to reimbursement of health care fund companies and insurance companies so that was viewed positively as well and then of course the other thing as we continue to see good solid economic growth around the world and even mentioned it last week show you're improved IMF forecast for global GDP. And and you know it. A lot of things are going in the right direction right now and more importantly there are few things that are countering them right now all of those things plus. Corporate earnings. All of those things are really leading some. Wind at the sales of of our economic growth our business stories and ultimately our markets and so this past week we were up a little bit. Not even on even not a year to date now were up around fourteen and a half percent excluding defense. I'm in the S&P 500 which is an index of 500 largest publicly traded stocks. And it's about 16%. Including dividends and so if you just put a dollar in the S&P 500 in January 1 and need to reinvest in any of the dividends hunt during that period of time you would now having 16%. Return for this year. Bet that's just fabulous and if you think that's good. You know look at international stocks the error op. About 24%. Including difference. And within international the best performing sector within international is emerging market stocks and their op almost 33%. Year to date. So yeah. You know sixteen for US. 24 for international 33 for emerging. I mean those are very very very big number XOK and Miller you know worst worlds for our clients. Four that. But more importantly we also feel like the underlying fundamentals are still quite some. And that's important to note arm he if if I were doing this kind of thing on my own investing on me on its so everything's up so I just keep investing might get lucky and do OK given what's happening in the market period of alternatives aren't the boat when you look at it knew he had a differently. I look at writes at frankly a look at it skeptically now but even though I cast the very skeptical I. That doesn't mean that in the end my conclusion might not be. Hey I think we should stay at the punch bowl and and and I think healthy skepticism is a good thing we certainly exercise that planning and our business arm but in the end I'm looking at the underlying fundamentals and and I continue to be quite comfortable that doesn't mean that the underlying fundamentals are overwhelmingly. Positive but I have to tell you are they're almost Goldie locks in nature there they're not too hot not too cold just about right to really support this and again I think if you see a tax cuts come through. I think you know you've got another leg up on this thing are really goes to Bob to all who is the chief economist at new zine. His comment a few weeks ago owners talk about the state economy and and I love the quote he said I think we're in the seventh inning of this baseball game but I think we're going into extra innings. And tax cut really is what's enabling the extra innings to occur at all. When we hear other people's screaming the sky is falling. They very seldom if ever mention earnings they will mention. Look at where stocks are look at the prices right but they never talk about the the earnings during an and that's. You know a real to me that's fundamental flaw in the end it built the whole thing about stocks and most people listen the show understand this the price of the stock is very much dependent on the earnings of that company. At the earnings are rising. Arm and dark and then you would expect this year corresponding rise in the price. Assuming that the conditions will continue for those earnings to two perpetuating a heck. And so yeah our world we're looking that's one of all of a bunch of things were looking at but yeah I weakened its you know. 2014 to 2016 yes and 500 had flat earnings snow warnings growth at all. And this year were expecting nine or 10% earnings growth next you're expecting nine or 10% earnings growth in all of that in itself. Should allow those stocks and all of the things equal to appreciate in value by you know 10% a year that's pretty good stuff and in fact that's what we've been seeing what's going on in the bond market last week well. Yeah that bonds decreased very slightly this week that tenure US treasury right now is yielding around you know 2.3 percent it's about ten basis points below. The beginning of the 2017 yield of about 2.4 4%. What's really interesting is that on the short end of the old Kurth. That too cool you're US treasury. Reached its highest yield since 2008. OK so why do you think that is probably the Fed grain you know right fed said were raising rates. And other bit to the US treasury now this at one point 55%. See you heard me right. I said the ten year he's paying 2.3. Dick two year is paying one point 55. That difference that spread. Is only you know 75 or eighty basis points less than 1%. That is at the lowest level us spread difference in a long long time. And that it normally is about a hundred basis points higher in other words instead of it being. Our point 8% difference between the tenure in the two here it's usually one point 8% that's a huge difference so what does that mean well here's what a couple things first of all. It means. From an investor perspective. You don't have to go out long. To get one point 55%. You can you can lock him for two years not ten years and you've got one point 55%. And the amount the incremental amount you're getting paid. To invest your money for ten years is really very very marginal compared to. You know let's see what happens to your show now and decide if we wanna buy more two years or 41 of my tenure at that point that's really interest and so from an investor perspective I certainly think it means that short term bonds are getting a lot more interest thing a lot more attractive than they worry you know just. A year ago the second thing that means is you know how do you interpret it well short term bonds tend to be more sensitive to expectations for fed policy mix and guess what we expect interest rates to Russell talk about that second on the second thing goes longer term bonds are more sensitive to the outlook for economic growth and inflation. And while the outlook for growth is improving the outlook for inflation continues to underwhelming I think that's really what's keeping. Longer term interest rates down at this point. What about overseas blondes the bonded sender gadget of the ten years Britain remained essentially were they weren't a week ago the German bond ten years around point 4%. The Japanese ten years below point 1%. And by the way the probability. Of an interest rate increase in the US continues to be about 88%. Four and December rate increase so you know it's very very likely that we will see that and essentially that's what's priced in already to these trek the short term treasuries any movement on the US dollar. Actually in the dollar strengthened slightly against the Euro and the yen and again that was. Primarily due to the good news we got around this tax cut. Probability. Well coming up we have some good investing ideas as well as more stories and are we going to go over and over all economic and market outlook from JPMorgan Chase later in the program all coming up on the play a strong financial for this just. Paul Parsons president of planned strong investment management. And you're listening to the plan's strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what you need to take a look at your investments and retirement plan called my office of 80889727526. That's 888972. Plan. Securities and investment advisory services opportunity for me to prevent member to go SIPC classroom investment management is an affiliate of this nation grouping is located at any 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 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 no matter what your invested in if these things matter to you. Call Paul Parsons at plan strong investment management to learn more. Call 8889727526. 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 farmer SIPC plans to investment management is not an affiliate of next financial grouping and is located at 980 Washington street Democrat. OK OK. Okay. I think OK. Okay it's. Okay. OK okay. Both plans from broadcast studios is the epicenter of journalism. This is no plans strong financial forum where all portions president of planned stronger investment management. And I can encourage here doesn't along with a ball Parsons. Today's program we've got to brought stories coming out torn about some mega trend stories that are really back up what cauldron talking about me just remind you polls toll free number 8889727526. That's nice children to plan according go online to plan strong dot com. And should email to all and he used he moved right back to schedule a no obligation portfolio review. It sounds formal but it it isn't necessarily but it certainly is very helpful. He it's when you can bring hey here's what I have Paul tell me what it means and policy map to see with you and our suggestions near the other thing we do. Course is we do an initial. Assessment of whether or not a cure but on track he your financial goal whatever they are I'm and so we do. AD TL financial planner of actually with all of our clients. And these financial plans a week we take into account all of their goals. And general we do is based on their investments and how much are contributing and so forth we won it through a whole bunch of scenarios so we really get a probability. Of you are achieving all of your goals and frankly what we're looking for is a probability north of 90%. On because a lot of people when they do a financial plan they do essentially what's called the average case which means. You know half the time you make it half the time you would Google don't understand who they're doing really and it's absolutely an instead what you wanna do is you wanna have a financial plan. That a achieve your goals were almost regardless of what market circumstances are concerned they give it this way you could retire you could stop burning could stop contributing to your your financial pork only and the next day the market could drop by 20%. You have as good a chance of meeting all of your retiree goals vs somebody who that doesn't occur with. Absolutely not and so we run at two thousands of scenarios and based on that we can give you probability of you being able to achieve all your goals will regardless of market circumstances tomorrow and 80% our disease our club better than flipping according to DOS doesn't yeah I think a lot of people don't really understand now when they get together with somebody in the put together a financial point you want a financial plan that runs to a number situations and really. Yeah we do frankly is we really beat up the assumptions. Because you know one thing you when I've talked about on just give one example assumptions that we beat up armed. Is psalms and the assumption about what what kind of investment reach an additional one common retirement. And you know a lot of models are based on historical data. And what did we learn or talk about a few weeks ago based on the Schwab situation I didn't an extensive study that said hey. You know equities historically generated about a ten US equities have generated about a 10% return. All over the last forty some years and a lot of models would just say OK so if you have X amount equities they're gonna make 10%. And what Schwab has come forward and sent us and we don't think that's the case we think future earnings. And future growth and in these kinds of situations instead of ten would be around 7% for US stocks and bonds historically they've been about 5% we think that's probably closer to where 3% now. Now and cash has historically been 5% we think that's very close to zero. And so you're zero to. And so you know eat it if you use lower numbers for reinvestment assumptions frankly we think that's more realistic. And another thing we try to do as I know I view my role. As a Stewart. For our clients and that means I would feel terrible. If we were actual plan with a client and then bad things happen in the economy and elsewhere. And they were unable to live the lifestyle what they thought they were going to be able to live based on the financial plan that we put to gap crime and instead what we do was we really try to be conservative were with what our assumptions are we try to have a high probability of success so that we you know we don't disappoint people we don't mislead them by saying oh yeah you're gonna be fine you don't have to contribute as much as you thought. You know that's that's typically not what we're saying declines were grown almost we'd like to look you know loan for bear and hope for Bonnie actually what we're trying to do. And have the majors mention that Paul does take pardon every one of those being sued if you go win. To sit for portfolio review and an initial assessment as he discussed. Paul will be there at the table below are the members of his team capsule take part in what's and the toll free number 8889727526. 888972. Plan. Or go online to plan strong dot com and shoot them an email. The direct act you are also have been talking about some of that the stories some of the business stories west Brigham and been going on in the market. We mentioned the dollar we mentioned the. Bonds and stocks were more oil prices so oil prices were pretty flat this week and I can say that beginning to end of course not flat during the week there's always something impacting the price of oil but. They started and ended around 52 dollars a barrel for west tax is Ron 57 a barrel for Brent. And US crude oil inventories decreased by another six million barrels this week reflecting about a 21 half percent decrease vs the same time a year ago. Now there were also reports that China's demand for oil increased by a million barrels per day in September before you say well I don't understand the context of that and that's part of the reason do you show us to talk about context. China. Worst post consumer run nine million barrels a day. They consume ten million barrels a day in other words there were 11% higher than they thought they were and that's a big different OK and that's a reflection. Of the health. Of their overall. Economy and because if you consume more more oil you're typically consuming it making things are transporting things and so forth so that's Butte is a very nice reflection that China's economy is probably not slowing down. The other side of the corner also us was helpful to the price well was geopolitical risk. And that rose again this past week as the Iraqis and Kurdish fight clash in the oil rich province of Kirkuk. And you know there are two concerns here that the Iraqis are gonna cut off oil exports from a year from this area of Iraq called Iraqi Kurdistan. Our as a collar move to the Kurds recent vote to break away from Iraq in an independence referendum last month so the squirrel. And you know there's lots of problems in Iraq between the Kurds and and the rest are now. And they voted to leave and they were trying to sell their oil independently. And not if you will share were with the Iraqi Government Iraqi Government wanted no part of that and so this is getting interest thing and there's a concern that there will be a disruption. I'm between that part of the world and and the bid to general oil market. And the market is also trying to digest what president trump may do associated with terminating the 2015 nuclear agreement with Iran. Because don't forget that if he says hey we think that these guys aren't playing ball we stings they're doing stuff they shouldn't be doing. He may reimpose sanctions on Iran and he made decrease oil flowing from that country to international markets. So you know there are a number of things in the geopolitical risks side but actually support the price of oil at this point and then finally one last thing I wanted to mention I'm not sure a lot of people recognize this but. Oil prices have rebounded a lot recently in fact they kind of hit their bottom this year at 45 dollars a barrel in June. And ever so it was kind of mid June as our call and since that it's rebound until almost 58 while dollars a barrel for. Brent crude. And that's because of the increase confidence that actually OPEC and other producers are going to be able to hold production down. And what were right now we are pretty much at the price of oil was at the beginning of 2017. But there's a big difference. I think you and I talked about the fact that at the beginning of 2017. People set our prices unsustainably high we expect to take to drop back down. Oil inventories are way too big worldwide. Well those oil inventories now are half. Half of what they were. At the beginning of 27 explain why that's important you minority incredibly important because. I don't have to produce oil. And I can still flood the market with a well if I have a lot of inventory out there. Well I have half that excess oil supply at this point that excess inventory. Available to flood the market with now what it means that is that this fifty dollars a barrel for Brent is a lot more solid number a lot more supported number. By the state of the market today and it was at the beginning of the year are another good indicator that this thing's firming up. Now speaking of oil Paul there's an IPO commune of Saudi Arabia would dart drug that before well you know yes there is a no there isn't that I mean this is just a funny one because. Ice you know last week you and I were talking about our two weeks ago maybe we talked about the fact that there had been stories that the kingdom of sat out might not move forward. With an IPO all of 5%. Of Saudi aramco which is this state owned. Will company. They actually wanted to not privatize it make it public goal IPO. And the reason they wanna do that is they wanna raise money to be able to fund the sovereign wealth funds of the deacons try to. Kind of wean their re economy off of oil and try and build other businesses that people can live from. A couple of stories that came out the last couple weeks were first the deal Michael Price it. Another one was that it only. Could be sold institutional investors are sovereign wealth bonds or. That there was a Chinese company that had made a bit so all these rumors flowing around. But this past week. On the gentleman responsible for us Saudi aramco can Ford said no. Were on track. For an IPO scheduled for 2018. And it's gonna be interesting to see. You know how this thing plays out because this is so dependent on the price of oil right where when you sell on asset. If it. If it is worth more in the marketplace while you're gonna get paid more for so it's clearly in the saudis best interest to get the price of oil ops they consult 5% this company. To be out there and by the way why don't we talk about this because I know 5%. Of any company doesn't seem like a lot why do people care about you know that being an IPO. Well it's just because this would be the largest IPO halt time. Okay here we're just kind of a good reason to be sure would be for about a hundred billion dollar IPO. So are clearly got a lot of people's attention I don't know how this thing's gonna play out but I have to tell ya I think it's going to be interesting to see how strong the market is for this IPO. I for one would look askance at it for one reason and that is because don't forget the reason the saudis have these oil. Our assets in the first place is because he nationalized. All the other companies in the seventies to take over these oil ask sooner America and in our second hole which like device and that's only that they nationalize the book thrown from the animal tracks ExxonMobil another span and the question is could they do it again. So I for one I'm not that while office. Only comeback kid some government data some other stories we have investing ideas and then of course we'll talk about that JPMorgan Chase I'll look when we return to supply strong financial form. This is ball Parsons president of planned strong investment management. And you're listening to the plan's strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what media take a look at your investments and retirement plan called my office. 80889727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can sequester investment management is an affiliate of this country grouping that is located in Washington street in Massachusetts. Hi this is Donnie 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. Now it's time to get organized and to make sure you have a financial plan will protect your retirement. If your financial act together. Call Paul Parsons at 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 plan strong dot com. Securities and investment advisory services offered through next financial group in member tumor SIPC plans to investment management. It and it's not helping and little tiny because I speak to him. Says financial dogs into your signing and informative. Ground at least is informative its plans to own financial forum where bold portions of the president's bold plans stronger investment management. Yeah and I'm Ken Carver County introduced along with Paul Parsons and the guy chock full program February a lot of information they started about business stories investing ideas mommy coming red I. Have to tell some of these bizarre stories in investing ideas are very cool and make and they really capitalize on the mega trends that debt we have. Prepared you know we've been talking about for a couple of years now we did that future of everything conference back in June 2016 right and a whole bunch of the ideas that were talked about that. Have really come to fruition and and more importantly our investors have benefited from that just mad you know magnificently. Sort of talk a little bit by the end when we go through this. Our and so we did some government data not a lot of guys you know and it was it was a mixed bag is the best way I can describe it but don't forget we just you know Q3. Om and and you know August September. Is is kind of a weird time as we have hurricanes we had you all kinds of disruptions going on out there that frankly impacts some of the economic data so it's a little bit hard and try to see you say whether or not this is more permanent or this is more the temporary situation be you know thanks to. A very very active hurricane season but let me just go through quickly first of all there was. Very mixed results in the manufacturing site there were really strong reports from regional port slight new York and mid Atlantic fed regions in October. But on the other hand. Nationwide. Industrial production for September. Was actually kinda disappointing up only about point 1%. In September after contracting in August and so. You know it that's a real mixed signal and the other thing it came out of the nationwide report on manufacturing and industrial production was that capacity utilization. You know fell back to 76%. And if you're a listener right now you're saying what is she down. But let me explain this to very simply. If you have you first the ball. Capacity. You wanna have you want to run Iraq over 80% capacity utilization awards you wanna have four of your five machines makings to OK you don't want three to five making it you don't want five of them five ideals for capacity utilization is around four out of five machines why because typically the fifth machine. Is slow and expensive so that drives up prices a lot if you're at three out of five machines it means that you're really not using all your capacity you're not growing nearly as fast as you'd like to grow I am so four out of five machines is the right answer. You're at 76%. Right now and it went bet you went down a little this this past month that's not good news the reason it's not good news is because. Your niche says first of all the economy's not humming along on all cylinders the second thing is it's saying is that it means that inflation data will be probably softer than you want it to be. I'm so rumored to improve more inflation. And just a little bit more utilization exactly right. And in my housing call so we a couple of housing reports and I can't it was kind of mixed results and and arm that the the good news was that housing permits. For new single family homes were up in September the bad news is. New housing starts overall and permits were below hole. The prior month levels are not terribly good news there and then on existing home sales yell for is they were opera. To about five point four million on an annualized basis which is a relatively good number and but. Year old three year it's down about one and a half percent so it's down a little bit from kind of its peak last year so kinda mixed results again not great not terrible you know. Strong but not really strong. End initial jobless claim what we finally recovered after the hurricane impact we came in at 222. Wow Kathy Kerry is that low regard for him that's very low right and that's following the prior week's 244000. And a lot of that had to do with fewer claims from hurricane impacted areas like Texas and Florida and Georgia we are definitely back now to pre hurricane period ultra lows for individuals filing for first time unemployment so that's good news the employment and a market continues to look quite solid. Simple here we are we're in Q3 earnings season Murray was October does that mean in September all these companies finished up and now it's Q3 earnings time getting those numbers what we sang so. It's expected first of all Q3 is expected to be kind to the ugly stepchild. Of 2017. OK okay all right well because the other three quarters all are expecting 101213%. Type our revenue on our earnings growth forgive me but. Q three is not expected to because of the performance a year ago slow their growth is not expected to be as much. Are but for the whole year earnings are forecast to be up around 9%. And as I said to you if you gift that your price earnings multiple stayed the same and your earnings are up 9% you'd expect to see stock prices up 9% while in fact yes and 500 it's our stock prices are up 16%. And dividends at this point this year so. He's certainly seeing that plus an anticipation. Of next year's earnings were down also projected to be kind of in the nine or 10% range so very very -- good stories they are one of the big reasons that we're seeing soft. Q3 earnings is because of financials and within financials are insurance companies so insurance companies. Are having to pay for all had our damage associated with a hurricane. And that's what's really are adversely impacting the air earnings growth. This year on the positive side both energy and technology are expected to lead the pack in earnings growth in Q three's so overall Q3 is gonna be not good not a great quarter but still gonna have earnings growth compared to a year ago and overall the year nine or 10% is is red projection is at this point any specific stories that help tell that one match actually dock at a couple stories that I thought our listeners would find interest and he didn't necessarily drive all of those results but I think these are widely held positions that a lot of people interested in one as a member of the fangs stocks self anger is an acronym for FaceBook apple Amazon Netflix and gruel I wanted to talk but Netflix because they reported a 30% increase in revenue in Q2 big numbers are saying that I'm a huge company already and they're revenue was up only 30% so I mean that's incredible they end up with a 104. Million. He'd streaming subscribers. Worldwide a 104 million. Put this in perspective. There are 320. Million people in the United States lets us own. You know that's essentially. One that that's like having every family in the United States matter and pretty much true I haven't Netflix now. OK I think he's doing to prepare or guard pretty much probably Wallace and by the way that was up five point three million for the quarter. Now okay that's a lot but most of that. On came from international subscription. A growth the other thing that's interesting is the company continues to spend huge amounts of one huge and increasing. Amounts of money to purchase exclusive original content they believed. That is the Cain the keys to the kingdom into this marketplace I think their right. And they are now signing creators. Of hit TV shows to develop shows specifically for that. So they're not just buying the contact not they're buying the creators and they are saying hey look you're a terrific. You know I think you'll like the dvd callies of the world you know you want somebody like data on your payroll and you just keep creating gets from me and I'm gonna solemn I'm gonna have them featured exclusively. On my streaming service oh and by the way one other thing. Profit margins continue to improve that Netflix is a good story or should I now by the way the stock was up only a percent or sell on the news but. I want people to understand. How big Netflix is at this point the company's market value now tops 87 billion. Okay billion this as the company that was sending CDS. Dvds these days in them in the mail although you're relatively low fiber terrorists and god that aren't are now worth 87 billion dollars just put that in person asked. CBS's. Market value is 23 billion at the stories are there only three times the market value of CBS now most people her CBS and many people may not have heard of Netflix. You need to catch on this cord cutting thing streaming service thing because this is where it's going this is a mega trend this is something we've talked about the past we believe this is the direction of you know most importantly where our children are. And the other side of the corn mean it is an older company while RI BM yeah IBM is a huge component of the doubt you know people look at IBM it's it's a story background. And for yet another quarter they saw profit and sales decline again. And what it really. Signals is the company's transformation has a way to gul and the stock had fallen 12%. In 2017. Minute tech stocks overall as a sector are up 24% to nine. IBM is down was down 12% during the exact same big spread their okay. And what that again tells he was as an investor. Tom. Believe it or not because of this earnings report. And the DTL within the earnings report. IBM stock was actually up nine or 10%. On this earnings report even though yet another quarter they're overall results were down. The reason for that though. Is because what people saw was progress being made. As IBM continues to try to transition from their older shrinking businesses. You know for example big. Historically they built and maintained technology on customer's premise spring they've built data senators not resided in your company's. Different locations. Wolf they're trying to pivot now to higher growth operations. Such is on delivering pay as you go services over the Internet known as cloud computing Brad okay. And cloud revenue and artificial intelligent businesses grew very well during the quarter. And contributed outsize gains to profits as well that's what. The analysts were looking at one base that they were very comfortable watching the price drive up 9% on the snooze by the way there's still. Down for the year but at least they gained back some of what they were down for the year thanks to their progress on a couple of these underlying initiatives that we've talked about our mega trends within the tax sector. Well when we come back more investing ideas and stories will start a football bowl which is a favorite story of mine but it's not Swedish anymore it's Chinese now we're gonna talk about for Chinese thing. When we return to plans from financial form. This is tall Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk station if you like what you hear on our show and what I need to take a look at your investments and retirement plan called my office of 80889727526. That's 888972. Plan. Securities and investment advisory services opportunity for them to prevent the opportunity as IPC classroom investment management is an affiliate of mismanagement grouping is located at any Washington street domestically and six. Hi this is on the 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 those 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 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 vision plan strong dot com. Securities and investment advisory services offered through next financial group member and SIPC plans to investment management is not an affiliate of residential roofing and his little game that I need to Washington street debt amassed. Ground zero for your financial news and economic commentary. This is the plan's strong financial forum where all Parsons president of home plans stronger investment management. It's. About getting Gerber and you're producing along with Paul Parsons in his plans strong financial performance let me just remind you polls tool. Free number. 8889727526888972. Planned. Or you can go online to plans strong dot com. It's very easy to do and you can send an email they're Paul seems to be right back to. Best way to schedule and no obligation portfolio review and an initial assessment upon his team do for you. And you can go and meet with Paul and his team crisply you know we mentioned earlier in the program how you'd take partnership won't of those meetings. And it then takes an hour and RF for show and a lot has accomplished there. But some folks can't get your office in debt limit and I imagine they can do it by phone as well. What can do it by phone or actually we cannot we can be used new technology and facetime Tricia and I saw it was actually very easy for us to have that first meeting and and get together and and discussed what schools are discuss what their current portfolio looks like and also talk about. You know what door of the state of their overall financial plan this man you know if we go from there and certainly can be a very interest in our hour and a half for a doctoral lot of stuff. Once again 8889727526. Sets EDD 972 plan. Or go online to plan strong dot com that's probably easier especially driving you can remain that phone number just remember plans strong dot com. All right so you promised me some interesting news of. Volvo it's a it's a great story and a great company released was what's more well hold onto your hat Paris I. I have a bunch of stories right now that I'm gonna try to bang through in the next you know except this segment since our last segment for the day and cash and what I wanna do is talk about some very cool investing ideas. That really again capitalize on these mega trends this is so important for how how we I you can get or try to generate outsized returns and all ball talk through a second so you asked about Volvo yeah well what are we talked about the last several weeks what I say you could swing a dead cat these days and went and he'd always hit a story about the Chinese have electric car market Arabs who they are and for those of you with that have been unable to join us the last couple weeks let me just explain to tee and very simple terms. China has decided that they are gonna become the king. Of manufacturing. Electric carts meant and debuted this no differently. And the Japanese viewed. The UT gas guzzler move of the seventies once the oil crisis occurred at the OPEC oil crisis occurred in the seventies. Japan ink said you know what we could grow our retiree economy by making these gas efficient these fuel efficient cars and an American manufacturers don't seem to have any interest in doing it. We could do what we could take over the world in this and it could really sustain our entire economy well China views electric car manufacturing exactly the same and the reason that's so important for China. His first ball they manufacturer. 24. Million. Our cars a year where we make sixteen. Here in the United States for a second thing is only 20% of families in China. Have automobiles are in the United States it's almost a 100% to mention this growth possibility there in turn our backs if you are OK so. It's an incredible market. And it's viewed very favorably by the Chinese Government also because unlike us. The Chinese really have a pollution problem because of your geography. In your major cities and combine that with internal combustion engines have real problems with you know literally being able to see the sky camera on and so our electric vehicles are viewed as a very very important step for how they will clean up the atmosphere around their major cities now so. All of those things have led us to become very interest in an electric cars in China. And if you think about it we the other thing that you have to put together in this puzzle. Is a month or two goals Volvo came out and you're really interest in this country you're you are big time ball below support I am the arm during their current since 1970 years. And and what's interesting about this is ball well made a startling announcement a couple of months ago that said. Were only gonna manufacture. Either a 100% electronic vehicles or hybrids starting in 2019. How many. Either hybrids or UVs they have tight through none zero that so they're saying one model year track now. Some we need are gonna either the only thing we're gonna make our hybrids and eighty's now apparent surprised everybody the Internet spot are I think it could blow a lot of people always certainly some eyebrows go there and this week. Vault vault unveiled its first high performance electronic vehicle in Shanghai under the brand name of whole star that's in Naimi should start to think about here mean may not known Tesla five years ago journal poll stars another 100 because pole star. Is going to be the Chinese version of all call and they are gonna meet their cars at a new plant in western China where they currently make cars and and much like China. Volvo wants to be a leader in electrification. And dear first card this pole star one is gonna be a hybrid it's gonna go on sale in China in the first half of 2019 but the all electric pole start to. Is gonna be available in the second half of 29 tee really so these guys are movement fast borrow and by the way the second vehicle is designed to go head to head. Would the Tesla model three from Niger myrtle we talked about Tesla and we support the stock is is very expensive but you know if everything goes right if Kuerten goes perfectly there are those and I also believe that that's what justifies the market valuation that I passed. On don't know if they built into their models that. That Volvo on pole star were coming in and they were gonna compete head to head with a model three in China at some competition gotten well especially. When you realize that Volvo's owner is eight Chinese company known as deal more okay. And it's funny how the Chinese companies tend to get a leg up in China compared to non in Chinese companies on soul and by the way there also play any competitors lining up for this marketplace they're joint ventures who edged General Motors and Ford always other players as well. So there's going to be a lot. Of competition for this on and big good news is the high end of the marketplace is Valerie. Our interest and because it's also the most profitable part but. Fall below is clearly casting the gauntlet by trying to be at the front of the line in China along would be YD and others we talked about BYT last week. Very very interest in times in which we live. I would not ignore the Chinese electric car market if I were. Are looking at growth investments for Klein. And speaking of China. There are launching a new Smartphone. Isn't this a shocker there so why away which is eight a large telecommunications company. In check in China. Is they just an announced they're launching a new flagship Smartphone. That they hope will help me get the top. Phoned me Kirk. In China. Now apple. Has been losing ground to domestic competitors for the past two and a half years and may need the iPhone X this new life on the very slick looking right. To really get out there and dazzle Chinese buyers. The Chinese flagship model though Hess features very similar to the iPhone and really any slightly lower price that sounds familiar doesn't and you know apple needs to on snarled air production problems with the iPhone hacks very quickly tied to market as flawlessly. As possible this new model. In order to maintain or grow their share and an all I'm saying is. You think about this way apple currently controls 61%. Of China's very profitable premium phone market. While while way has about a 16%. Share a lot pass to go right though for apple to either maintain. Or increase that share. A lot of the share price is based on that I would certainly state owned. Two make sure that apple stays on the ball. IPhone ex pass to be delivered has to be delivered in quantity to be able to fight these guys. Paul on this program and today it plans strong you talk a lot about mega trends and and the disruptions caused divide them and one of those areas as electronic payment. Absolutely right and you know. But mobile payment company PayPal. You a lot of us at PayPal beyond they've been around a long time so last year due out well their shares increased by nearly 75%. At 2017 that's slightly more than a market New Year's AF 16%. And that's because of breakneck growth in both e-commerce and mobile money transfer yeah. It's now worth almost double its value when it's spun off from eBay a little over two years ago is now as a market value of 83. Billion dollars that's more than American Express. PayPal Marleau. Yeah. Hot and it trades at about 32 times forward earnings it's a bit of a premium. Against the credit card giants you know MasterCard and visa now while PayPal is projecting to continue to have strong revenue and earnings growth they do have a liability. That they're direct competitors don't Kenny and I wanted to make sure that investors knew this. Jane meek and hold on to loans. To both consumers and small businesses that exposes them to risk of default if the economic environment worsens. You know so they do have a liability that these other companies don't just one question now do you wonder if eBay Russa data based on the mile. Ship might replace I would think so jolly and it was just two years you are now and but what's interesting about this whole space again people is this is mobile payment processing. I believe that cash is gone sometime in the next five or ten years this is just another step going in that direction. We talked on the thing starts earlier ended China has its own version of fame ball and we've talked about that as well the past it the Akron him. Four companies that are kind of the collar part to the fangs stocks FaceBook apple Amazon Netflix school in the United States in China are called that chain back stocks. And that's stands for that's an acronym for him GE dot com. By do Alibaba. And ten cent so next week I wanna talk about one of the Jeep that stocks. That. Parents did a big article on this last week and I have to tell you it's an eye opener and by the way these stocks are up. 5080 a 100%. In 2017. Past performance can't guarantee future results but the reason I brings up is because. They represented such significant. Growth potential for investors. A great program this week human guarantees for next week's program as well have a great weekend ball and you to enjoy this great whether or haven't it's supply and strong financial for this has. All Parsons president of planned strong investment management. And you're listening to the plan's strong financial forum on WRKO. Boston's talk station if you like what you hear on our show and what you need to take a look at your investments and retirement plan called my office of 808897275260. That's 888972. Plan. Securities and investment advisory services opportunity for me to prevent remembered him as I can sequester investment management is an affiliate business financial grouping that is located in Washington street domestically and six. And strung investment management is located 980 Washington street Dedham mass 02026. And can be reached at eighty to 89727526. 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 fender SIPC classroom investment management has not affiliate in its financial group think 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 information contained herein is obtained from sources believed to be reliable but its accuracy and completeness or not guaranteed neater next financial groupings nor represented of provides talked about.
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