good morning sense of things it’s Jeff

and Ron here once again with another

episode of the sense of things and on

today’s show we’re going to talk a

little bit about company earnings and

profitability we’re going to talk a

little bit about the markets we’re also

going to talk about the fear and greed

index we’re going to come back to that

one again and we’re going to talk about

the price of gold which we have a little

bone of contention between us sometimes

when it comes to that and last but not

least we’re going to discuss our friends

in China and their new AI tool and how

it has compared through a study when it

came to the stock market with chat GPT

so hold on we’ll be right back here in

just one second

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[Applause]

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hey everybody welcome to the show Hey

Ron how you doing my friend good morning

doing well never a dull day in the

market with news and political and

international stuff and technology and

all that good stuff so looking forward

to kicking this conversation off I was

laughing this morning watching the news

when I got up and I’m like the president

has been office for exactly one month

and all the crap that’s happened and

been done in that time period is just

outlandish so yeah some you can

understand other stuff I’m not really

sure but yeah look he’s got a defined

amount of time and he’s trying to

basically squeeze the golf ball through

the garden hose yeah I think the other

part is kind of leading a lot of this

has to be done in the Congress it can’t

the president can’t be the only one

doing it but at least leading from the

front when it comes to that yeah know

we’ll see we’ll see how it all plays out

with the markets and the economy and

everything else but I do like to see

money cut from the budget uh or cut

that are wasting especially waste and

abuse oh it’s just it it infuriates me

every day when I see it you’ve got some

fun stuff so let’s start with that I do

I saw this a few weeks ago and I’m like

maybe this might be something good to

bring up at some point and with the

weather hit it hit 80 out here a couple

weeks ago we’re supposed to have a

gorgeous weekend 8385 this weekend but I

had to pair this Austin Texas 18 I had

to pair this down because there was

probably three times the am of things

that you’re in Arizona so I’m going to

knock through these pretty quick some of

them I’ll explain others are

self-explanatory so you see this is

during the summer two trees fighting

over a dog in the

summer need a little bit of a spritz yes

no one would dream of putting vinyl

inside a car that’s that is exactly

right my I did not know this one but hot

air balloons can’t rise because the air

temperature is hotter than the air

inside the balloon and we’re right in

hot air balloon season it’s beautiful in

the weekend sometimes you can see a

dozen two dozen balloons in the air it’s

beautiful oh it’s my favorite of all

time the Arizona Arizona native Gary

Shandling who put it he goes I grew up

in Arizona and he said that people

always say oh but it’s a dry heat and he

goes yeah so an f and blowtorch but I

don’t want to put my face in that either

there are some afternoons in the summer

yes if feels like dragon breath in a

blowtorch no doubt about it all right

you can understand the reason for a town

name why and I had to look it up it

there is one it’s West a tucon yeah

okay so this was as the settlers were

coming across they just stopped them

with why are we here exactly I’d like to

go there just to see sunscreen is sold

year round and kept at the checkout

counter that is true if you go into a

Walmart or a CVS you could you take rain

dances

seriously we just had a Sprinkle of rain

here this past weekend and it had been

like two months since we had rain but

look the the trees and plants are

survivors they know how to survive in

this stuff when does your monsoon season

start oh that’s not until late summer

it’s I think it’s July August and parts

of September oh yeah let me tell you

when it rains it rains God tells you

it’s raining baby you can’t I’ve taken

pictures of just water coming off the

roof of my house you can’t even see

literally 5T in front of you it is just

coming down which you would never think

in July and August and here in Texas the

if we get a drop of rain during July and

August it’s like a yeah know that’s

amazing for us but here’s the whole

thing it’s if it rained a little bit

every day it wouldn’t be so bad but it

just accumulates it pack Stacks up and

then boom baby comes down like a

waterfall all right you know better than

to get into a sorry a car with leather

seats if you’re wearing shorts in the

summer now I think that’s true

everywhere yeah pretty much all right

you I didn’t hear about this until I

came out here a swamp cooler is not a

happy hour drink you know what a swamp

cooler is I know precisely what it is I

never heard of

one had this yeah yeah it’s this world’s

simplest air conditioner it’s the first

air conditioner and just using air

blowing over water which creates that

now what it also creates though is leion

ear disease that can kill you but I

thought it was interesting because if

you think about it like why Phoenix has

and Scottdale and Arizona in general has

grown so much in the last 50 to 60 years

and I try and tell people air

conditioning that’s one of the big

things but before that they had these

swamp coolers yeah probably the area

that popularized them at the beginning

maybe petrified doesn’t mean scared and

people that don’t know what petrify

means that refers to like trees and wood

petrified wood

anyway in the summer the temperature

drops below 95 and you feel a bit chilly

y this is absolutely true because your

body temperature goes up and when it

happens to drop all a sudden oh what

what’s going on what’s the temperature

and it’s 98 Degrees it it’s crazy yeah I

always wait for the temperature here and

in the fall and spring in Texas it gets

to about 72 degrees and that that’s the

perfect time when you like walk from the

inside to the outside and you don’t

notice a

difference yeah it is but here’s the

funny thing the pool temperat 95 the

outside temper is 105 110 and the pool

and the pool feels like an ice cube

yeah I don’t know about that but you

actually burn your hand opening the car

during the Summers this can be true also

this is why you should have a Tesla you

notice your car overheating before you

drive it

can’t

happen you realize that valley fever

isn’t a disco dance and just to let

people know the Phoenix Metro area is

known as the

valley okay your part your best par I

love this one your best parking spot is

determined by shade not distance so you

have a parking lot that’s got a little

island with trees on it and it’s 50

yards away from the main door and you

just see cars parked around that circled

around it just even if you can get just

a little bit of shade on your car

exactly you can you could be in the snow

then drive for an hour and it’ll be over

100 degrees this is true and I try to

explain to people in Phoenix that

there’s actually something called Ski

and Surf surf shops here and believe you

can go up the Flagstaff in Grand Canyon

you it’s not great skiing but you could

go skiing and then come back and do some

water sports yeah yeah that’s great like

California

too you no longer associate Bridges and

rivers with water I love this because

growing up in the Mid-Atlantic in Philly

Jersey and New York and Delaware yeah

all you got are bridges and tolls and

whatever here you got Lakes but you

don’t have bridges over them yeah and

you’ve got little dry AR royos with yep

and this is probably my favorite because

in a way it frustrates me because I’m

old school when I come to work and how I

dress when I want to meet with clients

you can attend almost any function in

Arizona wearing shorts on a tank top

there you go that was the big change of

pace for me coming from Dallas down to

Austin you know when I was in Dallas you

wore a as a financial adviser you wore a

suit and tie every day regardless if it

was a thousand degrees outside moved

down to Austin and I’m wearing a sweater

and jeans today and this is dressy and I

shift into like golf clothes Mo mode

during the summertime because my clients

come in less dressed than I am when I do

wear a jacket and tie this doesn’t

happen as often every now and then you

get somebody coming up looking at you

like like you stick if you wear Jack and

tell you stick out like a sore Thug oh

sure yeah number two they think you’re a

lawyer and I’ve actually had somebody

come up to me and ask me Hey listen can

I ask you a legal

question they don’t even know who the

hell I am they don’t even know my name

I’m like you can ask me I’m promise I’m

G be able to answer it might not be able

to give you the right answer but all

right anyway so you know you’re by the

way I had a pair of this down from like

over different things these are the

better ones that I could relate to I’ll

have to do a t a Texas version of it I

hear you all right next I love this you

visual capitalist I love they got some

good stuff so this goes back 35 years

but this goes back to who’s holding the

US wealth okay and the top 1% owns

basically half of our wealth yeah I know

we’ve heard other things like 80% is by

people over 55 or whatever it may be but

I thought this was interesting that the

bottom half has been shrinking and the I

think my opinion the number one reason

why they don’t own real estate and they

don’t have money in they don’t have

money in the stock market they have

money they’re not saving y they’re

spending probably beyond the means but

if they had money in real estate or in

the stock market those are the two

number thing two two things that

appreciate value and you got to we’ve

been talking about the credit card the

credit card balances and stuff like that

I can guarantee you almost 90 I would

say probably 70% of that is held by the

bottom 50% I would love someone to do a

study that takes the interest that’s

being paid on the credit card balances

and what if they meaning the people that

have the credit card balances had put

just what they paid in interest into the

stock market over years what would that

have accumulated to versus going to the

banks and the credit card companies

all right one

more so another visual capitalist one I

thought this was terrific Industries

with the highest profit margins and you

would think with the amount

of reduction in people

smoking that I don’t know margins would

be cut in tobacco but tobacco still has

the highest profit margin entertainment

software I thought was interesting I’m

not really sure what that is they they

say meta and alphabet I don’t know how

alphabet other than Google TV and

YouTube are entertainment software but

okay retail REITs really I don’t know

yeah and it’s interesting because they

do have profits but I don’t think of

REITs really from a profit standpoint

because they kick off basically all

their earnings to or the vast majority

of their earnings but yeah that’s

interesting and especially I would say

REITs right now retail REITs in this

last P five to seven years where so much

retail’s gone out of business that is

shocking to me that they’re that high

yep and I thought the other one was the

semiconductors which obviously is Nidan

broadcom the two big boys they’re 20%

now I think 20% is the average we know

Nvidia and broadcom has a much higher

profit margin so I thought this was

interesting people could pause the

podcast and look at this but this also

should tell you maybe where you should

invest your money I’m not putting it

into tobacco because they’re getting an

increasing share of a they’re getting

increasing share of a shrinking Market I

think this is a good thing to look at

when you want to invest money you want

to put it in where people have the

highest amount of profit so well and you

look at the big boy there is Philip

Morris and Philip Morris is peeling off

like a seven and a half eight% dividend

every year and it’s rising alria

offshoot yeah yeah and just pounding

that money right back to the shareholder

so yeah I look at it the same way it’s

okay I’m not a big fan of investing in

the industry but you know you can’t

fault it for the figuring out a way to

make a profit constantly so let me let

me share my screen here and talk about

our good old friend the fear and greed

index we haven’t addressed that in a few

months so I figured let’s let’s go in

and see how she’s

doing and if we are to look at it here

we are and if you want to know where

this is it’s actually on CNN uh just

searched by fear and greed index but

right now we’re neutral and that it’s

interesting because the Market’s been on

a rise for the last really last month

and a half for this year we’ve started

off with a really good year but the

Market’s kind of neutral on all that I

think part of that is some still some

uncertainty when it comes to the

conflicts around the world the terror

situation all of that stuff and they’re

hanging around that neutral range they

don’t know what to think and if you look

a month ago it was fear which I think

was coming out of that November to to

December period of time where the

markets were really down quite a bit

looking a year ago we were in greed mode

so it’s interesting to see where things

are going Market momentum is still up uh

even though things are neutral the next

thing I want to look at is gold this is

a this this is an interesting animal

because usually when the stock market

does well gold doesn’t necessarily do

well but what’s been happening here I

would say over the last six to eight

months from what I’ve been watching the

market has been going up and Gold’s kind

of been going up alongside of it which

is a little bit weird we had a really

nice run for quite a while in the fall

then the election hit and wow it got

crushed and then it’s been on a little

bit of a rise up for the last six months

here interesting I think part of that I

don’t know what your take is on it Ron I

still think it’s the same thing with the

fear and greed uncertainty around the

Ukraine conflict and how that’s going to

be resolved and how much money we’re

going to spend and I think the Tariff

issue here is another piece of it yeah

I’ve never been a gold bug not the gold

bug isn’t an a gold isn’t an asset or

whatever a lot of clients asked me about

it I’m like look if you want to put a

little into it that’s great I said

number one

I cannot determine valuation on gold I

don’t know how much has been mined I

don’t know how much is still in the

ground and here’s the other thing for

pre-retirees or retirees it doesn’t pay

a dividend no it’s not something where

you want to put a bulk of money into it

but people ask me where do you think

gold is going I just shrug I have no

idea but you’re right it is a fear thing

right it is absolutely a a fear issue

why people will go there I don’t

understand Bitcoin and we’re not going

to get into that but you’re absolutely

correct it’s a lot of the uncertainty

around the world and the last big thing

is the thing with the tariffs we always

knew that was initially a threat right

to use as a threat but the problem is we

don’t know if any of them are going to

be carried out we don’t know where the

negotiation is going to go and oh by the

way it’s not going to happen overnight

it’s going to take at least another

three to six months maybe to get a

handle on it but even after you get a

handle on it we still don’t know the

impact of it because typically it takes

six to 12 months to see any of that yeah

yeah are you going to see Revenue out of

it is it going to slow the markets down

is it going to raise prices we just

don’t we don’t know at this point and

you have so many economists that are

speculating on it and honestly we

haven’t seen if the president were to go

through on all this stuff we haven’t

seen this level of tariff since the late

1890s I’m reading a book by Bill

O’Reilly right now called confronting

the presidents and it’s running through

it basically goes through every single

president up to Biden I or actually

through Obama so it’s it doesn’t include

it doesn’t include Trump or Biden in

there but it’s an interesting book

because it’s it’s little short like

three three to five page chapters on

each president and it’s interesting to

see like during those times where you

know tariffs were like a normal thing

back in those time periods because we

didn’t have an we didn’t have any kind

of an income tax or anything like that

so that was something that came in

during the World War II period of time

when under Wilson that’s where tariffs

were seed off and they created an income

tax as a result of it yeah World War I

DW yep last but not least I wanted to

cover a little bit this is interesting I

found this on market watch this morning

there’s a like three or four Chinese

universities and the University of St

Louis if I remember correctly here in

the states that did a paper together on

chat GPT versus deep seek so if you

don’t know much about the whole

conspiracy of deep seek and all this

deep seek is a Chinese AI startup

basically it was created by a hedge fund

and they claim that they were able to

create this amazing AI tool with old

Nvidia chips and about $5 million which

I can clearly tell you is complete BS

absolutely and they they did a test in

this paper on chat GPT versus deep seek

and its ability to predict stock market

returns now this isn’t by charting and

all that kind of stuff what they did is

they had it each of them look at the

period from 1996 to

2022 and analyze articles positive

articles during all different Market

activities and they found that chat GPT

was much stronger at its ability to

predict that now is that does that mean

that you can use chat TPT to predict the

markets

new not by any means

yeah nor would you ever it’s I it can be

used I use it I use a portion of that to

analyze data for the trades I make on a

monthly basis but I don’t use it just

punch a button and say tell me what to

do but it just shows that yeah deep seek

is yes it’s the new hot thing but it’s

still not there and I would as a very

virulent AI user I can tell you chat and

something that is made here in the

United States is far stronger than

pretty much anything else that’s out

there including Google which Google’s

probably a year and a half behind where

Chad is today so don’t worry and I think

you

know it will continue to get better and

I think deep seek is not necessarily

going to be able to replicate uh what

they’ve done up to this point because

use chat to create what they did so that

said don’t feel so bad that we losing to

the Chinese in these cases I think good

stuff for this week man the markets are

solid again this week hopefully we’ll

get a little bit more solid looks like

earnings from my perspective have been

pretty damn good yeah we’re going to run

into a choppy period between now in mid

to late March with the just the

digestion of earnings and everything

that’s going on in the world so I think

we’re going to continue to go sideways

for a good four to six weeks and then

we’ll see what happens going into the Q2

and how some of these tariff and other

is things settle out yeah absolutely I

agree with you and I think even in the

summer I think we’re going to see a

little bit of headwinds this summer

coming in because we’re gonna I think

the administration will eventually slow

down on all the things that they’re

doing they just can’t do too many things

at one time and that’s then the market

will stop focusing on what the

administration’s doing and start looking

at okay the markets again and finding

other things to worry about agreed

agreed all right folks thank you for

joining us we’re as always we’re here to

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we’ll see you here next week