Capitalist Investor

The Capitalist Investor Squad is back in action! This week, all the news is surrounding Donald Trump's Indictment. Does it really matter who the next President is in regards to the stock market & economy? On top of this, it's almost the end of Tax Season. If you were to get a refund check at this point, where would the Capitalist Investor Squad invest it? The Masters Tournament is here. What do the guys have to say about who the winner might be? All of this & more on this week's "The Capitalist Investor".

Donald Trump's indictment seems to be top of mind right now... They questioned whether or not the market really cares who the president is.. It really matters if it's Democrat or Republican to dictate what happens with fiscal policy and regulations.  The big question is whether or not there is a political motivation behind the recent charges against President Donald Trump. In the United States, aren't you innocent until proven guilty? What is the potential of Ron DeSantis as the future president? Is America wanting a younger person in office?

What should you do with a tax refund if you have extra cash on the sidelines? Is this the time to be aggressive or is this the time to be safe? It’s almost the end of tax season and most people have already received their tax refund if that got one or they are about to save one. What should you be keeping an eye on in this environment? On top of that, the Masters Tournament is here and we all know a couple members of “The Capitalist Investor” squad love to golf and love to watch golf. Should you be betting on the Masters with the refund check? Just kidding..
 
Timestamps

0:00:00 Masters Week Coverage: Financial Topics and Potential Winners
 
 0:02:09 Discussion on Former President Trump's Indictment and its Impact on the Markets
 
 0:04:11 Political Motivation and the Impact on the Market
 
 0:08:48 Discussion on the Impact of Taxation and Education on the Economy
 
 0:10:29 Conversation Summary: Gen Z's Desire for Luxury Cars and What to Do with a Tax Refund
 
 0:12:16 Investing Strategies for Stimulus Checks and Tax Refunds
 
 0:15:12 Investing Strategies for Inflationary Markets
 
 0:21:12 Discussion on the Impact of Rising Gas Prices on the Economy
 
 0:23:11 Discussion on the 2021 Masters Tournament Odds
 
 0:25:54 PGA Tour Masters Preview: Analyzing the Top 20 Golfers and Dark Horse Picks
 
 0:27:39 Discussion of 2021 Masters Favorites and Dark Horses
 
 0:33:12 Discussion of Potential Masters Winners: Harold Varner III, Patrick Reed, and Dustin Johnson
 
 0:34:39 Discussion of Tony and Derek's Chances of Playing the Masters and Who Would Win in a Golf Match

Today, the Capitalist Investor Squad takes apart Suze Orman's list of the five biggest financial blunders that people can make. What does the team agree with and what does the team disagree with?  On top of that, you're seeing riots in France with the pension age being raised from 62 years old to 64 years old. Is this something we can expect to happen here in the United States? All of this & more on this week's "The Capitalist Investor" Podcast.

1. Don't Take A Tax Refund?
Do you get a tax refund check? Should you get a tax refund check? If you get a tax refund, it simply means you overpaid your taxes. The average refund is $2,400 and Americans in general are not particularly good at saving money. But if you over-pay, that could affect interest on credit cards and other debt throughout the year that could start stacking on top of each other. All of this should factor into your decision when talking to your HR department about payroll.

2. Don't Lease A Car?
Should you lease a car or should you buy a car? Leasing a car could pay off in the end if you don't plan on keeping your car for more than 7 years. This is an age old debate with differing opinions, even from the Capitalist Investor Squad.

3. Don’t Skimp on Car Insurance?
Can you get too much insurance? What happens if you have too little insurance?  Maybe you should look into an Umbrella policy to cover you even outside of just auto insurance.

4. Don't Spend Money On Things You Don't Really Need?
Okay.. you need to live life. Really, you need to understand how much you need to save and invest to meet your lifestyle goals and objectives down the road. Once you've got that covered, your discretionary income can be spent whichever way you want. In the end, life is about your happiness.

5. Don't Waste Money on Coffee?
Is it possible coffee makes you more productive which actually increases your wealth and income? How can you save money on coffee by making it at home like one of our squad members? Can not drinking coffee or not going to Starbucks really be that big of a game changer over time?

Timestamps

0:00:00

"The Capitalist Investor: Discussing Susie Orman's Five Biggest Financial Blunders and the French Protests"

0:02:11

Discussion on Tax Refunds and Saving Money

0:05:16

Tax Planning Strategies for Average-Income Families

0:06:23

Discussion on Financial Planning Strategies with Susie Orman

0:08:24

Heading: Pros and Cons of Leasing a Car

0:12:29

Heading: Shopping for a Lease and Car Insurance Tips

0:14:11

Heading: Understanding the Benefits of Umbrella Insurance Coverage

0:15:46

Conversation Summary: Financial Planning Tips for Retirement

0:17:59

"Financial Planning Tips for a Balanced Life"

0:22:13

Topic: The Impact of Government Regulations on Social Security and Gas Prices

0:27:52

"Exploring the Impact of Government Intervention on Free Market Capitalism"

"The Capitalist Investor" Squad discusses this week's episode, which includes the markets, Trump, China, Russia, and a new tax code changes in California.

Private jets are showing up in Omaha, speculating that the bank CEOs were trying to get the Oracle of Omaha to save the day. The conversation focuses on the current banking crisis and how regional banks are asking for deposits to be insured for the next two years. The speakers expressed concern that this could lead to a situation where a small number of banks control everything, which would effectively be a kind of communism. They also talk about the rise of Bitcoin and the fact that it could reach $1 million in the next 90 days if you look at an Executive of CoinBase & his bet. In the end, you could see a lot of consolidation within the banking sector, similar to the UBS and Credit Suisse merger.

The Federal Reserve raising interest rates later in the day could affect the job market and inflation. The guys note that some banks have been mismanaged and aren't operating as efficiently as before and that Silicon Valley Bank is an example of this. They also note that many job postings are ghost postings, and managers are only looking for supreme talent. The conversation concludes by noting that Elon Musk suggests the Federal Reserve drop back to 0% interest rates, so people can afford everyday items such as a brand new Tesla financed at 0% Interest Rates.

Timestamps

0:00:00

Episode 4: Markets, Trump, China, Russia, and the Mansion Tax

0:01:48

Heading: Market Rally and Bank Bailouts: A Conversation with Warren Buffett

0:03:41

Discussion on the Impact of Government Intervention on Regional Banks and the Banking Sector

0:06:42

Discussion on the Impact of Interest Rates on the Economy

0:11:28

Heading: Discussion on the Impact of Interest Rate Changes on the Stock Market

0:12:43

Heading: Analysis of the Fed's Pivot and the Impact of the Banking System Collapse on the Technology Sector

0:14:22

Heading: Discussion of Potential Economic and Political Consequences of Interest Rate Hikes and ESG Investment Strategies

0:19:32

Heading: Analysis of China's Role in the Russia-Ukraine Conflict

0:21:23

Heading: Discussion of China's Strategic Move in Taiwan and the Possibility of Nuclear War

0:24:13

"Muscle Cars: A Discussion on the Dodge Challenger Demon SRT 170"

0:27:04

"Real Estate Tax Scheme in California: A Discussion on Million Dollar Listing Los Angeles"

This week's episode of The Capitalist Investor features the three amigos discussing the recent collapse of Silicon Valley Bank. The Federal Government had to intervene as the bank had a high concentration of large depositors, many of which were tech companies. Unlike other banks, SVB had a very high concentration of a single area of focus, like Venture Capital This differs from other banks that are more accustomed to having deposits of firms and consumers with different backgrounds and professions. 

SVB recently took large deposits of money and invested in long-duration bonds over the past decade. However, with the recent rise in interest rates, the asset prices of these bonds have gone down, resulting in a significant financial loss for SVB. This bad management of deposits resulted in a loss of billions of dollars that was left unhedged against. That is complete moral incompetence and a moral hazard.

What should the Federal Reserve response be in responding to the default of Silicon Valley Bank in the wake of rising inflation? One of the biggest concerns is the concern around a contagion and the strength of the overall banking system. The system has changed over the years as the banking system uses numerous financial instruments, such as derivatives and options, and no longer just the usual hand the money over to the bank and then loan it out to someone else. This amount of complication within the banking world has made the extremes more extreme when things go wrong. This also leaves much less room for error.

What does this mean for Crypto Currency? Essentially these faults in the banking system are the exact reason that crypto came into light in the first place. The free markets are no longer free when the government intervenes, creating more extreme cycles. When things go wrong, consumers and companies want bailed out. But when you reward bad behavior, you get bad results.

0:00:00

Topic: Silicon Valley Bank Collapse and the Federal Reserve's Intervention

0:02:23

Impact of Rising Interest Rates on SVB's Investment Strategy

0:04:45

Analysis of Silicon Valley Bank's Risk Hedging Practices and Implications for the Banking Sector

0:06:44

Discussion on the Complexity of the Banking System and the Rise of Cryptocurrency

0:08:32

Discussion on Silicon Valley Bank's Risk Management Practices and Impact on Woke Culture

0:13:49

Analysis of the Impact of Regulatory Rollbacks on the US Economy

0:15:45

Analysis of the Impact of the Financial Crisis on the Banking and Investment Industries

0:18:50

Heading: Balancing Act: The Impact of Inflation on Middle Class America

0:22:07

Conversation on Capitalism and the American Dream

0:23:31

Discussion on Global Economic Crisis and Debt to GDP Levels

0:26:10

"Exploring the Financial Risks of the End of the World and the Tech Sector"

This week on The Capitalist Investor, wealth advisor Dave Abate was invited to discuss current news and events related to the economy. He shared his perspective as an adviser and a planner, offering insight into how the current economic climate could affect clients. Dave discussed the testimony of JP Powell and the fallout from it, the debt ceiling and Social Security being directly related to the talk. Tony the Tiger was also present to offer insight and humor. Dave discussed the continuing rate hikes, saying that a pivot is not likely anytime soon and that it'll have to be a quick one when it does happen. 

The conversation delved into the surprise that the market has in reaction to Federal Reserve chair Jerome Powell every time he speaks. This is because he has been repeating the same message for the past six months, that interest rates will stay higher for longer. Senator Elizabeth Warren called out Powell for wanting to increase unemployment by 1% in order to increase inflation. The discussion then shifted to the mortgage industry, which will feel the impact of the higher interest rates, as the cost of a 30-year mortgage has since increased by 60% from 18 months ago. The conversation ended with a reminder of how rising interest rates make it difficult for people to own a home, as the cost of a $1500 mortgage is now $2400.

The conversation centers around the real estate market and how it has been impacted by the pandemic. It is noted that 18 months ago, a $400,000 house would have been reduced to $250,000 in order to have the same monthly payment. It is also noted that the mortgage industry makes up 15% of the GDP and it is likely to take a hit in the coming months. The speakers discuss the potential of finding distressed sellers in the market, as well as the possibility of taking advantage of the current low-interest rates. They also consider the potential of the Fed's terminal rate rising to 6 or 7%, which would further impact the real estate market. Ultimately, the conversation concludes that the real estate market is likely to see a downturn in the coming months due to the pandemic.

The conversation is discussing the unknowns of the mortgage industry and whether or not the Fed will overshoot the rate. The consensus rate has been creeping up for 6-12 months, starting at 4.5 and now at 5.6. The conversation then shifts to how the pandemic has affected the consumer, with many people only buying necessities such as food and not super discretionary items like bikes and TVs. The conversation concludes with the idea that the Fed may overshoot the rate and then quickly pivot to reduce it, likely in the next meeting.

0:00:00

"JP Powell's Testimony and the Impact on the Economy: A Discussion with Wealth Advisor Dave Abate"

0:02:32

Analysis of the Impact of Rising Interest Rates on the Mortgage Industry

0:04:29

Heading: Impact of the Housing Market on Affordability and the Mortgage Industry

0:08:43

Discussion on the Potential Impact of Rising Interest Rates on the Economy

0:10:56

Discussion on the Potential Impact of the US Debt Ceiling Crisis

0:13:06

Discussion on US Treasury Bond Market and US Defense Spending

0:16:19

Discussion on the US Debt Ceiling, Inflation, and Social Security Reform

0:18:15

Heading: Exploring Solutions to Social Security Challenges

0:21:38

Discussion of Potential Solutions to Social Security Funding Challenges

0:25:14

Heading: Exploring the Possibility of "Bare Minimum Mondays"

0:27:39

Heading: Exploring the Impact of Quiet Quitting and Working Smarter, Not Harder

0:32:35

Conversation on Paranormal Experiences

Welcome back! The boys are back in town! All three amigos are back at it this week discussing Consumer Confidence being weak & earnings expectations being guided lower for many companies. Many people are citing that consumers are strong, but are they really that strong? What's going on with Pete Buttigeg's excessive or not-excessive use of private plane travel? All of this & more during this week’s “The Capitalist Investor”. 

Consumer Confidence & Earnings

Is the consumer strong or weak? This is one of the hottest & most debated topics right now around the economy & stock market. At the end of the day, whether or not consumers are strong or not, consumer confidence is not high at all. Consumer’s are feeling the heat, whether they are strong or not. When you take a look at earnings, some sectors seem to be keeping forward guidance elevated and some sectors seem to be lowering guidance. What’s interesting is that those discretionary sectors that should be taking a hit in a downturn seem to be keeping earnings expectations high, while those sectors that shouldn’t be greatly impacted in a downturn are actually lowering guidance. What does this tell you about the overall consumer? The three amigos discuss this and more.

Stock Buybacks

There’s been a lot of news surrounding stock buybacks and the woke crowd seems to be running with it. There’s people going around saying stock buybacks only benefiting the stock owners and the insiders of a company, all while the employees get screwed and don’t get to see any of that money. At the end of the day, a company has an obligation to all stakeholders in a company all the way from the shareholders, the debt holders, & the employees. It’s really a fine balancing act. But the people who are against stock buybacks don’t really understand stock buybacks. Stock buybacks are essentially a replication of capitalism, since all they do is return money to shareholders for the shareholders individually to decide where that capital should go next? Should that capital stay in the company? Should that capital go towards a new investment? Will that capital be spent and flow through the economy? What a lot of people don’t really understand either is majority of middle-class America rely on pensions & 401(k)’s for their retirement, all of which benefit from stock buybacks and returning capital to the shareholder.

Pete Buttigieg’s G5

Pete Buttigieg seems to be cancelled this week. After reports that out of the past 18 flights he has taken, it has been through a private charter & has cost American taxpayers of $40,000. If you breakdown the math, that’s over $2,000 per flight. But is that really excessive and is Pete really traveling alone when he goes private? At the end of the day, people seem to be complaining about anything and everything and Mayor Pete is in the spotlight right now after showing up to East Palestine 3-weeks into the disaster. This is debated by the capitalist investor team.

Welcome back! The boys are back in town! All three amigos are back at it this week discussing disappointing earnings within retail & record-breaking retail volume coming into equities. What is causing this record breaking volume and does it say something else about the consumer? What’s cancelled this week? All of this & more during this week’s “The Capitalist Investor”.

Retail Earnings Miss

Retail earnings were say.. underwhelming. There was high-expectations in Q4 that were supposed to highlight the strength of the consumer, but really earnings just highlighted the potential weakness. At the end of the day, stocks like Walmart are seeing a shop-down effect with even higher income earners now trying to find bargains at Walmart. People are focusing on groceries more than discretionary spending, which is the lowest margin business many retailers operate in. What’s in store for the retail sector and what’s in store for the average consumer as we head through 2023?

Gambling Recession

There’s evidence that a lot of retail money is flowing back into equities, but the surface level might not tell the full story. A lot of investors are buying options on equities that expire that same day, meaning they are taking on a ton of risk. Really, many investors are gambling at this point. If you look to Draftking’s earnings, they were a lot hotter than expected as well. The Capitalist Investor team discusses dark pools and the mentality a lot of Americans are facing in these uncertain and hard-strapped times. Could the equity volume coming in from retail investors really just be a big gambling face-off to try and make a quick buck? Possibly.

Artificial Intelligence

Okay… we really can’t cancel AI or Artificial Intelligence. But a lot of weird things are happening with AI now, with Microsoft’s “Bing” saying some really weird things to it’s users. What is the cutoff and when is the line drawn with Artificial Intelligence? Is the world becoming too efficient? The Capitalist Investor team discusses their thoughts around AI, and maybe even some flat earth talk. Yes.. you need to watch the episode to find out.

This week on The Capitalist Investor, Luke and Tony discussed what is broken in the economy, stock market, and personal ways of thinking. They also discussed the hotter-than-expected Consumer Price Index (CPI), which the markets rejoiced about, and Luke's conspiracy theory about the CPI he found on Twitter.


0:00:00

"Exploring What's Broken: A Discussion on CPI, Market Rejoicing, and Conspiracy Theories"

0:01:52

Heading: CPI Report Reveals Inflation is Still Accelerating

0:03:48

Analysis of Rising Inflation and Its Impact on the Market

0:07:22

Heading: Analysis of S&P 500 Predictions in Unprecedented Times

0:08:55

Heading: Risk Management and Market Outlook Discussion

0:12:50

Heading: Investing Strategies: Managing Risk and Overweighting Sectors

0:16:58

Heading: Active Stock Picking in the Current Environment

0:18:33

Heading: Discussion of Possible Conspiracy Theory Regarding Biden's Petroleum Reserve Tap and Inflation

0:20:59

Heading: Environmental Pollution in Martins Ferry, Ohio

0:22:42

Heading: Impact of Chemical Spill in Ohio River on Half of America

0:25:04

Impact of Contamination on Economic and Psychological Well-Being: Examining the High River Incident and Electric Vehicle Safety

0:26:58

"Exploring the Impact of Electric Vehicle Fires on the Golf Course Industry"


The opinions expressed in the podcast are for general informational purposes only and are not intended to provide specific advice or recommendations for any investment, legal, financial, or tax strategy.

Welcome back! The Capitalist Investor squad discusses what happened during the POTUS state of the union address, earnings so far in the stock market, & new words that Jay Powell has invented during his interviews. What do you need to know this week to keep up with the economy, the markets, and your money?

Earnings seem to be declining, but the market is rallying. One of the thoughts is that the market was discounting even more negative earnings growth and the earnings aren’t coming in as bad as expected. Technology, with the largest weightings in the S&P 500 reported last week and the market shrugged off right in-line if not lower than expected earnings & guidance. Chipotle reported earnings and the market didn’t like it. Are people being more price cautious now? Or are people still swiping their credit cards to keep earnings afloat? 68% of companies continue to beat earnings estimates, but this is the lowest since Q1 of 2020, and then 2013 before then. What should you expect the next couple of quarters?

Liar! Liar! The state of the union seems to be the same every year.. the opposing party shakes their head the entire time, and the party in power stands & sits hundreds of times throughout the speech. It honestly is very similar at this point to a high-school pep rally. At the end of the day, what value do these speeches give? What facts did Biden actually give and what lies did he give? At this point, it seems like the Democrats & Biden are looking at completely different data than what everybody else is looking at. Things like inflation, jobs, oil, taxes, China & oil are all topics that were hit on during the State of the Union. What things did the Capitalist Investor squad digest during the speech and how will Biden’s & Democrats thought process impact your money & your life?

Who knew Jay Powell was a comedian.. he had the whole room laughing during his most recent interview. The market seems to always react positively now when Jay Powell speaks, even if it is more hawkish. Does the market not believe anything that the Fed & Jay Powell says now? The new word he is using is “Disinflation”. He has been using the word “Disinflation” a lot lately, and it sounds eerily similar to how he used the word “transitory” a lot and we all know how that turned out. The break down of his recent remarks seems to suggest that the Fed will remain higher with interest rates for a longer period of time, and might even go higher than a lot of people expect. But the market seems to like that news, which means there is some sort of discrepancy between the stock market & the federal reserve.