The PlanStrong Financial Forum 12-02-17

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Sunday, December 3rd

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I. From those plans stroll in the broadcast studios he would still play and strong financial forum where your host. Jim farmer her family friends in the plan's strong investment. Full force it's time for Smart investing you simply fall and I. Incorporated yeah that's why we call Parsons from cholesterol investment management and quote we are. At the tail end of a really interesting and important years of investors really need to pay attention to this program because lots of stuff to do in there and just about a month. The biggest remind folks and it argenbright we are recording the show and. That is true I am by action heading off this afternoon late later this afternoon on this were recording on Thursday afternoon so that may explain why we're giving some truncated news well while we ever discussions today simply because. I will be overseas on Friday when I think a lot of very important things going to be happening. Right and so the most important thing of course is that tax bill leadership as we record the show it looks like it's going to be voted on very shortly but we don't we don't know for sure rated and it looks like McCain has said yup he's gonna support it now I think comes I'm Susan Collins and maybe a couple others but. I think god I would wanna get in the way this thing right now politically FR one of those folks I know the New York Times thinks otherwise cause they sent in their editorial page they had something about people in Maine should call Susan Collins and and teller know it's not their best interest but. Overall weeks I expect the the bill to pass the senate are probably on Friday and I also allow I think that's what the market's anticipating as a result. This week the markets up essentially about 2% to remember which makes it very very nice a week of gains and you know we're seeing some all time record highs and and we will also by the way may see the first 1%. Up. Day in quite some time we haven't had as you know. Mean much volatility at all in this market either up or down in 2017 up until now we had only four off days of more than 1% or Ford down only days of more than 1% in the S&P 500 which as you know as an index of 500 largest publicly traded stocks but it looks like Thursday could break that wide open and DS and 1% on Thursday if things continue to go well before you know by the close of business on Thursday now. On WR killed on Tuesday morning. You wouldn't be deep talked about the tax bill and and some of the ramifications. Let's listen to that now. More important matters financially here. Trump tweeting out again today talking about still working on that tax bill making it better every day minor changes but it's gonna help the middle class and that are etc. Well where are we on this thing. You know a lot of what we said last week's still applies TB. If trump has said that they're gonna make adjusts the few changes to quote him. And and if I think it's gonna make its weight throw dirt you know if you read the newspapers. You know they use it up pretty inflammatory words like hold outs and insurers and all kinds of stuff like that but. India and I think this is just kind of a classic negotiations. No one as a hard no that's for sure. On the Republican side and there are even some Democrats that some may have a cup benefits that go along with this as well. I think that the thing that came out this week it was a little bit unsettling that control be capitalized on was. The CBO the Congressional Budget Office issued a report indicating that the pour end up paying more under the shadow tax bill while the rich benefit the most and you know I can tell you I'm a math guy I'm thinking to myself wait him out for my a lot of support don't pay any income tax to start with so. How can it be worse off. And and facts about 45% of Americans pay no federal income tax and 27%. Pay no income or payroll tax. So but here's the deal acacia trying to make sense of that. The CBO was assuming that the repeal of the AC CAA individual mandate. Would result in many lower income Americans choosing not to buy insurance. And then not claiming tax subsidies. That help them defray the cost of health coverage police say that and all the way because people will no longer have to purchase health insurance. They may no longer receive tax credits subsidies for insurance that they don't purchase. Only in Washington does this count as attacks increased. So I would pick with a big grain of salt. What's going on today trop this meeting would senate Republicans are at all at a closed door lunch. The Senate Budget Committee is expected to get I get together this afternoon and hopefully vote if they don't vote that will be a bad sign. Next after that would be a full chamber vote later this week. And by the way there's a big gap what's going on right now a bunch of the markets where any of these side senators that are on the fence. They're they're getting some advertisements in their home states encouraging people called Iraq. Stay tuned I guess is the message on this B you continue to be bullish on. I do like you know one thing I wanted to mention PP odd as it relates to investors that I think of debris under reported story. Is that in the senate bill this is really important. In the senate bill. They actually have a provision. That would make people use our first in the first Al methods when they have to calculate their capital gains. What that means that you have to sell your older shares first. When you sell your shares and that may result if they've appreciated more than your your work shares. That may result in recognizing bigger gains standing investor would want that so I for one would like to vote against perhaps. I certainly in the in the interest of our clients but it's something that hasn't been reported a lot I think it's something important for investors to now. Stadium Paul Parsons of the planned strong investment management group. Founder and CO com Paul yes there was Cyber Monday and that meant that my wife was giving a lot of our money to our house. Because just because he's our money right. I'm only or what are billion dollars exactly I know I saw that these the these big hundred billion dollar man. But when it gets me well and related to the tax bill topic. Got me to thinking about Beatles a little bit in what you know. These so called fang company's first of all explain to people wanna bang company as those that don't know and in aren't these the guys that. You know some people say these that these are the old they're not the new anymore and other people say no these are the ones you gotta wash because these are the ones that are making money now we're we stand with them. It's a really great question first evolved I think companies and it's just an acronym for FaceBook apple Amazon Netflix and global. And you know these stocks these companies have grown just per terrifically over the last few years and they become. Huge companies to the sort of half a trillion dollars or more in value and just actually massive companies. And from an investor perspective. You're just this year for example people make 35 to 60% trust him twice seventeen. Compared if the standard port 500 which is made about 17%. So a lot of people richest these because. They represent essentially the new economy. Do you know that third Chinese counterparts for these companies that have actually significantly. Outperformed down in 2017. And that acronym is the jays bats and that acronym that's for GD dot com Baidu Alley baba and ten cents. And their stocks have appreciated almost. Fifty to a 120%. Year to date. So this is some really good opportunity and it really capitalizes again on the new economy and I especially on e-commerce. And so that's why it's something certainly to consider a person's portfolio. It's a market that's growing very very rapidly e-commerce and China's corn almost 30% a year. In the US. About Black Friday sales were up sixteen or 17%. Woody commerce. Either way those are very big numbers but China's growing even faster than the US at this point. I've talked about this before but I I know there's some Chinese companies that you think are like way ahead of Amazon in terms of how they operate. Well it's interesting you say that that you know Alibaba is really what home alone and it and it's almost the same size as Amazon. But the number two online retailer in China is called GD dot com. Smaller it's only worth about fifty billion dollars. But the thing is JD dot com has built logistics operations from start to finish including everything from the warehouse. Even getting delivery out of the last mile for customers divorce so it's even ahead of him aside from that perspective. And when you look at their deliverable metrics it's unbelievable we get 58% of their packages. Delivered within one day of the order I mean that's just incredible. Again now we get to the word bullish ball but you sound accurate but what should we hear her. Well I'm excited I think that we are such an interest in time BP. Where you know I get past performers can't guarantee future results but there are some things here. There are very very interesting in the way that the paradigm shifting in the way that people shop the way they live the way they used to the way they communicate. And that's what. You know our segment all about us talking about where are we going how can investors potentially take advantage of that. And how can investors potentially incorporate these things. In pivotal role portfolio. Always great talking you will talk to next week woke what we're gonna actually be be legal work off some of that pie you've got. Update us. Wanna learn more about tax plan or the had planned strong 888972. Plan. Or go online at planned strong dot com request to call from all you'll get one also you can do we knew we show Saturday at 3 PM. Right here on WRKO. Securities an advisory services offered through commonwealth financial network member. Finreg SIPC or registered investment advisor. Our poll are always interesting to listen to you and BB I have a couple follow up questions on more or less to do with the Chinese e-commerce she talked about the things in the Chinese version of the thank you George that's right e-commerce I update there. Yeah actually there was summit that happened this last week related to Alibaba. They actually went to the dollar denominated debt market this week and issued seven billion dollars of bonds maturing in five and a half after forty years in five different groups. Are now the ten year demanded a premium of just about one point 1%. Too dissimilar term US treasury so you have -- gonna get about three and a half percent between 34 and 35. On a ten year Alibaba corporate bond -- dollar denominated cash just to put that in perspective. That's a little bit higher than what you pay on apple what apple pays you on but it's almost exactly what if you're lending money what hurts to Wells Fargo or Bank of America. It's right in that range so it's kind of eight plus range assists are considered quite a good credit now the company issued the bonds in anticipation. Of hiring bar higher borrowing costs coming down the road in China and the US. And you know the proceeds locally they're going to be used for acquisitions and growth theories including physical retail stores and logistics assets this is just very very similar what Amazon's doing right. And by the way this is their second bond issue in the last three years. But we come back we'll covers more information. Regarding your discussion with the B and the tax bill of course will look at what the bond market's doing it's the plan's strong financial for this just. 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 immediate take a look at your investments and retirement plan called my office at 80889727526. That's 888972. Plan. Securities and advisory services offered through commonwealth financial network. Finneran SIPC. A registered investment advisory. OK okay. It's. It's. But I'm strong broadcast studios and the epicenter of journalism this is the plan's strong financial forum where all portions president of planned stronger investment management. And I'm Ken carver had the anchor desk along with Paul and in the store we started off the program talking about the tax bill because that is the big story of the day no doubt about it. And then we'll get back to that in and out after recover the updates they're Paul will. We'll get back to talking about the markets and other investment ideas and stories that we have for for a listeners today so. You want to get we we heard you know Bibi talk about the tax bill and we we got one update with the Chinese e-commerce think. But in terms of investment implications of tax bill yeah BV an address that little bit we did we just we we. I didn't have a lot of time to talk about a it's this whole idea of how do you recognize capital gains and right now if you have say you bought Apple Stock. And you had the ability and say you bought it over a period of years she bought some ten years ago he bought some five years ago when you own son in you bought some more recently while the stuff that you bought ten years ago probably has a lot lower cost me some of the which you paid less or back then then more recently right and in in and in a taxable count that matters because in the end when you say OK listen I want off floats some of my Apple Stock or sell some of my Apple Stock. You get to choose which of those shares you actually won a salad you do that EDU choose high cost basis stock because you're trying to minimize the amount of your capital gain or you choose low cost basis stock because you say you know what I'm not gonna have a lot of income this year this is a good year to recognize a lot of capital gains so I'm gonna select the lower cost basis stock. But you have that ability. The big thing that happened is that the senate version of the bill does not allow that capability any longer instead you were forced. To select your oldest shares first it's called fight files first in first out and as a result this really can. Limit your ability to minimize the amount of income taxes is that your pain. Not this something also wanted to mention about this this is incredibly important now even more than most times because we have just gotten through an incredible run in the market over the last. What eight years nine years now think about that. And if you think. But the market is up substantially doubles more or more in the last eight or nine years since the depths of the Great Recession. Think about some very widely held. Berry got impressive stocks that are out there that a lot of people own for example. Apple or Amazon or FaceBook or global buffeting stocks that we talked about earlier right. Well those of also appreciated mightily and they've appreciated a lot more than the market pass and so save the market's up two times are you saw some multiple like that since the bottom of the recession. You can actually say that some of the fangs stocks are up you know too cool to six or seven times as much as that. So think about the gains that are there and what it also means though is that if you happen. Consistently. Rebalance your portfolio over a period of time what I mean by that is sent him look I don't have any particular stock or percent more than 2% of my whole ballots. Well if you're a stock it grows that you -- seven times rather than twice the market. Then you're gonna be way you overweight or not stock and you should carry your position back in there as long as you still think that you wanna have about a 2% position and that stock if you haven't done that. Well all of a sudden now you're gonna have a very big gain to recognize that and the point that I'm trying to make assess. If you have not religiously. Managed. Rebalancing your account and you do have some significant positions that are out of balance in other words overweight in your portfolio right now now is the time to address it not in 2018. Now is the time to address what I mean by that is. Have a plan in place because. If this provision survives. That's in the senate bill right now. Now that says hey start 12018 you've got to use fight file when you wanna have a plan in place to address that so that you can actually go after which shares you're thinking about selling in 2017. And not waiting until 2018. So if you find yourself think about it this way if you know that you have some well known stocks have done very well and you haven't read Dow stocks or mutual funds that you haven't rebalance for a period of time 234 years. And it's in a taxable account you may want to call our office and ask us to help you put together a plan because here in the hears that then the net result. 90% of this thing is getting a good plan together. Then if the senate. Our provision does survive the overall reconciliation bill and you need to pull the trigger you'll be in a position to pull the trigger if you don't do that advanced planning and then at the twelfth hour you say oh my gosh fight post commenting what do why do now there may not be enough time to actually help you. So my what I'm trying to encourage listeners to do is call my office if you see if you are in that circumstance of the taxable account. And you have some holdings that you know have done well and you're probably overweight is this the time to take a look at those are put a plan together not necessarily to execute. But should have a plan. So that this provision survives you're ready to pull the trigger. Balls to free number. 889727526. That's 8897. To plan. Where you go on like to plan strong dot com send them an email somebody who you're right back into our review on Monday. It's only months left foot blimp and here reared its December already answered Iraq you didn't get on with this as Paul said. He snooze you lose you better have a plan ready eighty Dade 9727526. Or plan strong. Dot com are also is go back to covering the other markets stories. We addressed our total bought. Well I. Even with the stocks as I said US stocks were up 11 and a half percent this week and by the way a nice chunk out on first day in anticipation. Of the senate tax bill going through and I should mention again offer listeners the just joined us we're actually taping the show. On Thursday afternoon because some flying to London tonight press so as of now no vote has occurred within the senate and also frankly even the markets haven't closed yet but it looks like we're gonna have our first off. 1% day in quite some time in the recipe. And internationally. It looks like it's been a relatively good day as well again markets dropped half a percent to 1% on the international side if you look at year to date numbers. I mean all you can do is sit there and smile. Year to date yes and 500. Is up about 20%. Including today's activity including dividends while international stocks are up about 26%. Including dividends. And on the emerging market front. Those dropped even more there up around 3334%. Accurate day so these have been very very odd good returns. Kind of across the board both in the US and outside the US you compare that to bonds. The aggregate bond index which is an index of high quality bonds in the United States. That's only I generated a return of about 3% year to date. So as we are set at the beginning of the year we thought that stocks would look more favorable then bonds to invest in and 2017. And I would argue that 20% return the S&P is a lot better than 3% on the gag bonded axed. Any news from the federal guarding a bump in the interest rates yet can their risk it looks like it's about a 100% probability of fact Powell came out this week and said no he could understand why would their guilt widespread support for some sort of an interest rate increase. In the December timeframe shooters indicate that at very close to a 100% probability. There's also about a 55%. Probability that the next increase after December will be coming in March and that there's a second increase in 2018. That's projected to come in September. You know we're getting awfully close to the three interest rate increases that the Fed has said that they wanted to do 12018. In addition to the one in 2017 and remains. You know I looks like our work world certainly working in that direction with Fed Funds futures to be consistent with what the Fed's targets are at this point. About high quality summer months. You know what are they were essentially flat this week the German ten years re around point 4%. On the Japanese ten years awfully close to zero just north of zero and US treasuries you know what they are they actually as the markets were up to stock markets were up the bond markets for down a little bit and the yield on the ten year US treasury Knauss about 2.4 2% almost exactly where we started 2017. Double the dollars and the dollar is essentially a flat against the yen. But it weakened a little bit against the Euro I think it's around a dollar reaching a dollar nineteen per Euro zone helping your trip to London and know what concerns Theron pound sterling national don't have to worry as an issue about oil prices you know I'm surprised about oil prices. Oil prices are worse 57 or fifty bucks a barrel as of Thursday afternoon for west Texas and around 63 a barrel for Brent. They didn't move up as much as I thought they would even after the new host. Odd that we got on Thursday afternoon but OPEC had agreed to extend the oil cuts until the end of 2018 that stimulus that the that the markets have been waiting for him. And yet it seems that most of that was price stanch. To the markets at this point so short answer around 58 dollars a barrel for west Texas around 63. For Brant at this point. Bonn to lose a lot of government data released this week can we like to look at but there were two reports we should know about can surely there's absolutely so the first thing is that there was the second estimate of real GDP growth in Q3 and that was revised up from 3% up to 3.3. Percent that's that's a very very nice number again it's it's kind of pointing in the right direction that's certainly something that the Fed is looking at sank give data check mark that it looks like economic growth this relatively strong another key metric that the Fed looks laughed at of course is inflation and be our number one indicator for inflation was released this past week for the past month as well and that is the core PCE price index. And what we saw was point 2% month over month and one point 6% year over year price inflation are for this broader index and more comprehensive index and for example the Consumer Price Index is what then the message terrorists it's good but not great I believe the state is good enough certainly to support. The Fed's stated strategy which is. Which is one interest rate increased in December and three more in 2018 it's certainly looks like run half of that. All we come back we'll address stories about people scoring. Investing in Asia. And who were air it's always returns a classroom financial for this just. All Parsons president of planned strong investment management and you're listening to them planned 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 at 808897275260. That's 888972. Plant. Securities and advisory services offered through commonwealth financial network. Remember Finneran SIPC yeah. A registered investment advisory. It says financial dog continued signing and informative. Ground at least it's informative it's Glenn strong financial forum where gold portions of the president's bold plans stronger investment management. Hydrogen Garber you didn't. As along with a ball forces let me just remind you Paul's new website is up and it's fabulous. It's the same website address so you'll notice plans strong dot com seeing URL plans strong dot com. But he's really is beautiful easy to operate lots of new stuff there in easy button to click to have Paul call you right back that's very nice. Also of course you can contact the office email them. We listen this program you can listen to the Bibi morning reports on Tuesday morning that those are there as well to do want their. Armed and you mentioned before last we dimension poll that. Your clients can also access their accounts very easily. Absolutely is so they're we really tried to simplify the look and feel the web site has streamline it or give really good current information on its so people visited often. Because shares a deal. A lot of people listen to our show. 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Plans strong dot com it's as easy is that if you like. 8889727526888972. Plan. Or once again just going to plan strong dot com. And I should also mention catch that if somebody wants to god get does the past the weeks packed show or what I did we VD on the prior Iraq Tuesday morning at 935. If you go to radio show score plants aren't our com select radio show host garner the bottom of the page you can you can see right there the latest style weekend show and the lead us weekdays segment you can download it right there you can download them all onto your computer on your mobile device. And you cannot take it to the gym with you or whatever else to listen to with a little bit. I think it's not a very simple way for you to stay in touch with what we think is important markets. Actually once again that's plans strong dot com go to the radio agent. You have yourself a new podcast every weekend to new broadcaster you count VDs segment as well that's correct plans strong dot com. Are also we have some other news we wanted to target but I know big story about bitcoin you know we don't hear much about bitcoin it pops up now and again and it truly pumped up this week. It sure did in the recent that popped up was because the price went through the absolute ceiling for a week it eclipsed 101000. Dollars free single pick point backs up at 900%. Spot this year. So that's slightly more than 20% which is what the S&P is up right here and there are people that are jumping on this bandwagon and it's almost hard to avoid having the conversation about it simply because it's on the front page of the Wall Street Journal a whole bunch of times some because of the order of magnitude of what's happening here right now having said that I wanted to talk about bitcoin because I don't think a lot of people understand that and I'm gonna put myself in that carry its confusing okay. Armed and the reason I want people to understand this is because I really do fear that this is a speculative investment. Let me start with the what is bitcoin. Bitcoin is a four a digital form of money but there's no government or Central Bank. Printing it or standing behind it like another kind of currency right it's a system designed to allow people to exchange value directly to slick currency. But it doesn't have the middleman. Brokering the transaction. What I mean by that there's no bank there's no credit card company involved. What that does it allows near complete anonymity. When making payments on line and so there and that's a real plus in some cases. But in other cases it can probably allows some real shenanigans to occur right there are so much more to understand about bitcoin. But I like Buffett's old adage that if you can't understand a product but you probably shouldn't invest in it. Not more is gonna come on the subject over the next few weeks but. ISI said I want our investors to understand I consider this a speculative investment. You're you're gonna see stories in fact there was a story on Thursday morning about grandmother who had invested some money in big corn and made a lot of money in a few days and and and they touted that that's great but. If you can't understand the underlying value underneath this thing that's creating their return. Then in some ways this really reminds me of the Dutch troll ball. Bottom craze of the sixteen hundreds for our listeners who aren't that familiar with the investment history let me just give you one perspective on what it will look menial wise. This occurred back in the early sixteen hundreds. In Holland and people started to use it will look balls. As a mode of currency and the more beautiful the ultimate tool up. The more valuable that ball became one at some point the value. For the bulbs that would create the prettier tulips. Became absolutely ridiculously overpriced until there was a crash and people literally. Lost their homes and they lost everything that they had used coal ball actually pay for. My concern Wii is bitcoin is I don't understand the underlying value. That a bitcoin. Actually provides the market place. And I'm concerned that. If you look into this at all you'll find out that there's a lot of math behind this there are a lot of algorithms behind this. And I think you're gonna say while this is a lot more complicated than I had any idea to belief. Anything like that you should look at very very carefully and so. I'm gonna talk about this a little bit more in weeks to calm but at least for now I would say please please be careful would bitcoin I know what's on the front page but it's certainly something that I would consider to be speculative at this point and certainly there are a lot of people are writing articles about it right now but also considered to be quite speculative. Paul we do like to talk about disrupt here's on this program a lot of there was an article this week your parents in the duke instructors revolving cloud computing which is one of your favorite subject exactly right I mean bitcoin is definitely disrupt her opposite disrupt or to the currency markets it does is to disrupt Kurdish Fiat currency but you're right in Barron's this past week they had -- very interesting story about what was going on a cloud computing cause as you said you know we see cloud computing is being very very important. As it relates to how technology will be hosted. Over the lot of the next bunch years but did I learn something this week that I hadn't learned before and that is that there's a new way of right leading software. That. Requires far less work from programmers and guest dramatically better results at the same time it's called server less so like a server by server less. And it would first of the fact that no one including the programmer hashed Janelle. That much about the server computers running the code in the cloud it turns out and you wanna hire the furthest thing from colder strike it turns out that when you're writing coach sometimes you have to write commands that are appropriate for one kind of a machine vs another figure to dissuade some programs work on apple while other other machines work on IB ammerman Novo. Machines rate well it's no different for colors when they're writing stuff for the cloud as well but if all of a sudden you can get this server less language networks. Then that takes away a lot of the need for those programmers to spend a lot of time and and it looks like they're moving in that direction now guess who's leading the charge small polish usually Amazon parrot it right again I think Amazon is the market leader in cloud computing with the Amazon web services and again they're accompanied by Microsoft in global in offering this server less kind of platform. Now this actually should increased demand. For cloud computing because you don't need co owners spending as much time getting stuff up to the clout so that's a good thing right but here's the bad news the bad news is it can weakened brand loyalty to any one clout. Which could weaken the grip of the oligarchs you don't think about if you're Amazon Microsoft and Google and some ways you're making it easier. For somebody to shop around because you don't need code specific to your cloud structure okay. And what that means that it probably is gonna enable more price competition. Now. All ready all of the major cloud providers have Cheryl services available. It's gonna be really interesting note to see how this impacts market positioning. And profitability. Of cloud computing over time so yet again cloud computing itself. Is a disrupt or. But now serve Willis is actually disrupting cloud computing and potentially who the winners and losers are within that space. Pose another more article in Barron's this time regarding investing in Asia excluding Japan. We need to smoke that well before your eyes glaze over on this one. Note that this market is up 41%. Year to date on which is just really quite something compared to about 20% year to date for the S&P including dividends. Now the strategists interviewed by parents became bullish on the region in February after being bearish for the prior five years now that's how long. These markets have really not done that well but what's driving the gains. Is synchronized. Global growth think about it this way 87%. Of all the countries out there Gary economies are expand. OK 87%. Are that's a lot all moving in the same direction at the same time some other factors that are driving the gains. In the Asia ex Japan markets. Include technology sector gains don't think about Tencent and Ali Bob we discussed on talk about them as well as Samsung and apple suppliers. They have good earnings growth it's up 22%. Year to date and the dollar has remained stable two week at the same time and don't forget. China's new economy now represents more than half the overall valuation. Up from only 20% in 2007. Not amazing. And China's new week army. Now represents more than half the overall valuations so think technology. And semiconductor all those things are adding to this real terrific growth and out performance at this point. Always come back to return about flying cars and what that might mean for investors when we return its plans strong financial form. This is tall Parsons president of planned strong investment management. And you're listening to the plan 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 advisory services offered through commonwealth financial network. And Finneran SIPC. A registered investment advisor. Ground zero for your financial news and economic problems aren't. This is the plan's strong financial forum when Paul Corson to President Obama plans stronger investment management. I'm Jim Courier had the best along with the ball once again Paul's new website is up and running and it is fabulous plans strong dot com plans strong dot com Paul still for number he needed. 9727526. That's eighty 8972. Plan. And by the way if you wanna call from me all your dues go to plan strong dot com. Phil won three or four little areas on the students were on the front page. Hit the button that says I'd like a call from Paul and ought to be jingle back the next time mommy in the office would should be on Monday. Right it's amazing thoughts my favorite part of the website actually because it really. A lot of folks some post one room to a lot of Reading and maybe after the reading talk Q does the post more like me who like am I think I taught his guy I can learn more than reading about him. Maybe have some questions asked directly and just speaking directly have you call my office azalea. It's great and like a sense for those that do wanna learn more about us we have a whole section of the website just dedicated to that to learn more about. Who we are our backgrounds how we manage money what services we provide and most importantly in my perspective how we're different from everybody else because you know we don't sell insurance products were fee based advisor we have we think we have quite a few advantages out there that. Many listeners would wanna learn about so go to the learn more section to get that by the weight you also go to the radio section listen to our latest radio show or you can listen to my latest segment was he'd be both of those are at the bottom of the the radio show area. And then finally even within the current clients section there is not just information for our current clients but there's actually some additional investment information there as well. That non clients can access including. Some very very important economic statistics and market statistics and the latest papers that are available from our brokered deal from commonwealth financial network. Once again just. Outta plans strong dot com plans strong dot com. Well Paul I area talked a little bit about flying cars and last week we addressed. Over there I'm still not ready to get into one of the strongest public you know no thanks to you she got I mean eyes like it's like a big draw well and I also see that they're talking about through the Olympics in Los Angeles is ten years are talking about. Landing on routes in their little bit in their drone and actually working on releasing those buildings now to be able to have these takeoff and landing spot so that they're planning on it I'm not sure I wanna get more of those I'm right behind. You go first asked I mean how it goes I mean can you imagine that's really quite some additional it's not quite the Jetsons it's getting Jerry's are awfully close shows some other news regarding even a local low flying car company. That's actually right you know there's an Arab company that's headquartered in Woburn that was recently purchased by the Chinese firm deal late. And they expect to deliver their first flying car in 2019. And planned to launch of vehicle capable of vertical takeoff and landing. By 20/20 five now just to give you an idea this is the one that has the fold up wings and wouldn't you know you drive along like it's a car until it's time does. You know it'll do you drive to an airport he get onto a runway and you can take off and land. So it has essentially folding wings and with that and otherwise it acts like a car. So it's a pretty cool idea but it you know it's gonna get interesting to see how this thing works especially if they can get vertical takeoff and landing -- supposed to -- and use a local airport now the Chinese company knew we wanted to know that name well because you're Volvo guy and they bought also -- can't remember admit they've committed to going all electric with that brand by 2019. And my guesses all of this kind of fits together on the future of transportation that they you know the Chinese certainly see transportation. Going media's vertical going up in the air and as well also being electric rather than internal combustion engine power. So how are established. Our manufacturers. Relating to this what are they doing are they worried about what's happening in the future. You know there're there are a bunch of people that believe that the established. Big Three or formally Big Three auto makers. Arms are really in good shape to take advantage of their ultra low valuations. But you know I'm one of those guys that thinks that there's a reason why these companies are ultra low valuations and I wanna -- explain that a little bit at first I should give just a little bit of background. On you know when I was in business school at Dartmouth in 1979. The CEO of General Motors came to visit and mr. Murphy on the or forget somebody asked him a buyout. Planned obsolescence. And whether or not they'd literally built that into the cars and he didn't say yes but he certainly didn't say no and it it really tells you how far we've come from a time where should they do literally building and equipment and parts with the idea that it would fail. In some period of time was designed only worked for three or four years and then it was time to buying new car the feud that is a good model if you look at it now think of where we are today the average age of a car is nine or ten years old and the reason that they've gotten so much longer is because. Up planned obsolescence wasn't a really great planning strategy the other thing that really bothered me about the auto companies was how hierarchical. And war they had layer upon layer of management and the Japanese kick their tails in the eighty because they want to continuous improvement and at and Detroit really resisted it and took a long time to get there and ultimately kinda got to it but they still. I. I you know there's a lot of reason there's a lot of good reason out there there's a lot of history out there that supports why he might be skeptical as to whether or not the Dick the existing Big Three auto makers in the United States could actually get this thing Don and compete with the really that the Greek auto makers coming out and when I talk about those. You have to talk about Tesla and think about what test was done in the vehicle market its sense they've been around think about how good their practice. Think about the what they've done with the electric batteries. And they've created a terrific match windier product. The question is can Tesla Joseph actually what the big car companies can do which is can they manufacture on masks because it's one thing to be a specialty. Carmaker and make 50000 cars a year it's another thing to make two million cars a year and that's the difference between Tesla and say G camera for I mean the order of magnitude is massive. And so you know going forward the question is. Will someone like a Ford and G now Mora Fiat Chrysler will legal be able to make an electric vehicle that can compete. With that castles of the world and make it in volume cause I'm telling you rate now old Ilan mosque is learn in the hard way that what she called manufacturing hell isn't that much fun right now having said that you're right. These car companies are the US domestic manufacturers that that traditional ones. Have been making big efforts to try to move forward we're going towards electric vehicle slowly and and also autonomous driving cars should mention that as well let me give you a couple of examples that GM bought autonomous driving expertise and now is testing a fleet of autonomous driving cars. In San Francisco. They expect to remove the driver from the equation in quarters fiscal quarters not years. And by the way GM is investigating a ride sharing business that uses autonomous driving cars in the early 20s20s. That sounds pretty ambitious task for dunks while bought Ford they're gonna introduce thirteen electric or hybrid vehicles and the next five years. And there are new CEO has good experience in ride sharing a new technologies including electric cars. But again I don't look at them as being as far forward for example as a GM. VW. Is making a major push into electric cars they aim to sell two to three million of these by 20/20 five and they're also. A leader Laura Thomas driving the Saudi 88. Right now has level three autonomy which means your you'd you have hands free driving under certain highway server and noticed the are the only ones that have that rain now so if you think oh Tesla is the only one that has a Thomas driving capabilities think again. You know I would never count out the German engineers and figuring out a lot of this stuff from and speaking of German engineers. Daimler which is that the parent company of Mercedes-Benz. Says it plans to offer unless I'm easy version at each of its models by 20/20 two. And finally you probably don't want to forget about Toyota is they made this car called the Prius after earlier gaffe there were the first to the market with a hybrid. And the question is. Do analysts also expect them to emerge as the industry's next gen tech leader because they have big investments in hybrids. Solid state batteries and solve driving technologies. And by the way unlike a lot of these other companies Toyota's really profitable well so they have deeper pockets to be able to fund this you meet her or talk all the time about what castles going through right now and trying to raise enough funds to be able to keep on their mission and it's not a simple thing to do because at least right now electric vehicles. Cost a lot to make and you're not able to charge a lot of money for them unless you're really going to a very small segment of the market. So are they just reacting to Tesla your palm and if so are great. I think they are reacting to Tesla. And I think they are late but I think they have considerable resources. And not like I said the other that's going to be interest thing is. China is a really strong incentive to go electric vehicles because of their pollution problem the question is will the rest of the world have the same problem. In the United States a lot of the pollution problems have gone away. And so now the question is will there be demand outside China because I think the Chinese are very protective of their own market. I think they're gonna make it difficult for the Big Three manufacturers to make a lot of money the error. Having said that the jury's out we don't know how climate change legislation are all any other requirements are gonna play out I think it's a good thing or investing in them. I think Tressel has been a terrific leader so far in the high into the market it's going to be really interesting to see if any these conventional car manufacturers. Can be viewed by investors as more like task slot and less like their old selves. Paul another great show a lot of good information once again ball still free number 8889727526888972. Planned. Or just go to the new web site plan strong dot com that's planned strong dot com policy next week have a great weekend gets a plan strong financial form. And strong investment management's located ninety Washington street Dedham mass 02026. And can be reached at 8889727526. 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