good morning audience I hope you’re

having a wonderful spring morning it’s

Jeff and Ron here once again with the

sense of things and on today’s show

we’re goingon to talk about some fun

facts that Ron has he’s got a few things

to talk about in the market and what’s

going on and of course as per usual the

Big Wall Street firms are adjusting

their end of year this time down because

they’re so smart and they know more than

the rest of us about where the Market’s

going to be by the end of the year and

usually they’re incredibly wrong as

always Ron and I will stick to our guns

with whatever we come up with or what we

came up with in December and we’re not

making adjustments from there then we’ll

discuss a little bit about the what I

would call the Tariff hysteria that’s

been out there we’ve talked about

tariffs but just I I love to watch the

media and how crazy they can get with

all this stuff so that’s what we’re

going to discuss today in the show stay

tuned we’ll be right back on in just one

second hey everybody welcome to the show

Welcome to the sense of things Ron how

are you my friend good morning good

morning doing well there there hasn’t

been anything going on in the news it’s

been boring in the last week nothing’s

going on we’re in that spring break mode

everybody’s going on spring break next

week here in Austin everybody’s in the

calm mode the political temperature is

simmered down a little bit no volatility

in the market the

snoozefest I thought the funniest thing

I saw something this morning where

they’re like crowds of people went after

went after Tom Hol and I’m like I

wouldn’t do that man he’s a tough son of

a I don’t think yeah I saw some

video

can’t watch that stuff anymore oh it’s

just pollution for the brain yeah it’s

just ridiculous I’m like you know what

the only thing you’ve got to do is

protest find something else better to do

because you suck at it obviously and I

truly believe whether it’s one side or

the other over the years I think these

people are paid what are you doing in

the middle of the freaking day that you

got nothing better to do except feel

rightous plus you come out with your

really nice pre-printed signs if you’ve

ever as a business own owner had to pay

for anything like that I mean each one

of those things is probably $5 to $10

and you’ve got pre-printed signs and all

this all right a good protest with a

bunch of handwritten signs I’ll buy into

but if you’ve got pre-printed signs I’m

sorry yeah show stuff in crayon a magic

marker yeah I’m go with that magic

marker will go with that so you got some

fun stuff for us right yes I do here we

go last week we did three trivia

questions we’re going to do three more

this week nice the Fingerprints of what

animal extremely resembles human

fingerprints um I’m gonna say

chimpanzees or some kind of you know

what I hear you that’s where I would

have gone to it is not it’s actually one

of my favorite animals that I saw in

person in the wild it is the koala

really yeah that kind of sh too yeah and

I haven’t been we’re one of the things

one of our bucket list items is to go to

austral a zoo and they’ve got a like a

zookeeper for Day program where you can

select you want to go in and spend like

several hours with and feed and all

kinds of cool stuff like that so yeah I

wasas are on my list my wife’s not too

happy about koalas but I am so I was at

the the Sydney zoo and obviously they

got animals there we don’t have here but

there were there were some areas we

could talk offline where I had gone

somebody had told me where to go and

you’re in the wild they said yeah just

look up the trees when you’re going down

this road and there they were it was

really you don’t want to get close to

them but it was actually very cool no

the ones that are in the regular that’s

it but all right here we go I wouldn’t

necessarily you and I are a sloth but

how long does a how long does a sloth

take to digest its food they’re slow

moving as it is let’s go with not much

metabolism there 24 hours at least 24

hours

okay two weeks holy crap that’s a pretty

slow digestive system that’s a massively

slow digestive system so good God and

what are the two most popular spices in

the world two most popular spices I’d

say cinnamon and

paprika okay

no pepper and mustard and here’s pepper

mustard I didn’t know mustard was a

spice I know a Spice bottle but I’m

thinking you know I think squeeze

mustard or whatever or even grainy

mustard or whatever but yeah I wouldn’t

think mustard cuz we cook a lot of

different kind of Cuisines and I

honestly can’t think of

a I would use mustard that Germans use a

lot of mustard but other than that’s

weird I just don’t know a lot of

cultures that use mustard as a spice Hey

listen you and I aren’t just here for

decoration we’re here to we’re not here

for prettiness but yeah that’s

definitely what we’re here for all right

so here’s the first of the fun slides so

of course corporate earnings are finally

getting revised and that’s why and we’ll

get to some other fun stuff on the next

slide when we get to the end of the year

there’s always a problem next year is

going to be great it’s going to be this

it’s going to be that and then look I

think that this is interesting if you’re

just looking back at 10 years the red

lines here about how many corporate

earnings the guidance have been

withdrawn or lowered yeah that’s crazy

now obviously this is all based on

tariffs but the thing is the majority of

them aren’t even in place yet no how do

you know the effect now obviously this

is going to affect some businesses more

so than others and then some businesses

won’t be affected at all I just think

this is crap I’m sorry this this is just

garbage this is this is the game that

corporate CEOs play where it’s like oh

we’re going to withdraw or pull back

guidance because of tariffs and then oh

look at the amazing earnings we’ve had

and caused the stocks to go up I think

the funniest thing and we’ll talk about

this in my little Riff on the Tariff

stuff I think the funniest thing is so

many of these companies the markets oh

we’re gonna just drop them down because

of tariffs okay they do software what

tariff is going to be on software unless

you’re making a hard physical product

there’s not a tariff on it I I know but

you know what this is the sideways

action on that because what the what the

EU or whatever basically they could do

taxation on Amazon products and other

things like that there there are things

that they can do that that could just be

ridiculous but that that’s the other

part I think all of our friends in

Europe you know they love to play this

game oh we don’t have tariffs yeah but

you have a 20 freaking percent value

added tax which I still don’t understand

what value added you’re adding to it to

cause me to T yeah oh you added value to

something so we’re going to tax you yeah

it’s not a direct tariff but you’re

slapping a purchase with 20% on top of

it and you brought up something earlier

on this slide that I wanted to bring up

also because I truly believe that I

don’t know if this is a one word or two

word maybe you can help me out with this

usually I’m a decent word Smith but I

truly believe by doing a withdraw of the

corporate earnings they’re sandbagging

yeah oh absolutely is that one or two

word sandbag I think it’s one word I

think it’s one word yeah but oh yeah I

totally saying hey look we don’t know

stock goes down whatever and then when

everything the dust settles in the next

couple of quarters hey there we go oh my

God look at this Q2 earnings were just

way above what our estimates were yeah

whatever I know like it’s the game play

and then you see this with

what you’re going to talk about in a

little bit too with adjusting the market

expectation too absolutely but what I

want to do before that I wanted to go

through some of our old favorite slides

here with a few updates so here we go

this is the delinquency rate on credit

card loans interesting this is 35 years

yeah it was peing a little bit at the

end of 2020 three and into 2024 but this

isn’t getting any better yeah and if

unemployment goes up this will

definitely take effect the next one is

credit card balances this is another one

of our favorites this is continuing to

go up it’s not going anywhere and then I

think the most egregious thing that

Congress does need to get involved is

the average credit card rate yeah for

years it it vacillated between 10 and

16% all of a sudden in covid we Spike up

and we’re over 21 to 22% this makes no

sense I I I don’t understand this

especially with the prime going down but

this is just basically the banks and the

credit card companies just being

egregious with the rate because they see

that the carryover debt is so high I

think that this is this could be

considered price gouging or they could

use some kind of terminology this it’s

just straight region yeah and like I

said yes I get it they’re trying to

protect them themselves and their

shareholders a bit but the reality is

okay you’re going to have more defaults

if you’re turning over 25% per year or

you’re growing your amounts at 25% per

year and this is just infuriates me that

we create organizations like the

Consumer Protection Bureau whatever the

hell that thing is and why are you not

looking into this why are you looking

into everything else that umbrella but

it should yeah this should be this

should I would think this is the biggest

thing that should be under that consumer

okay we’ve got people that are going to

be losing they’re basically going

bankrupt and losing

everything because their credit card

interest rates are

22% yeah I get it they’ve got to be up

there because there is going to be

defaults and they’re increasing although

it looks like they’re rolling over a

little bit which is interesting even

though stuff has gone up but hopefully

the if we can get some certainty in the

market hopefully small businesses and

businesses in general start hiring

because we know the government isn’t

going to anymore and the government’s

going to be negative to that impact

they’re going to be a lot more

government employees looking for jobs so

hopefully the private Market’s able to

gather some of those Folks up because

there’s lots of really smart people that

work for the federal government that

would probably be picked up by a small

company I would assume yep and we’ll

have to see maybe on a quarterly basis

we should monitor this yeah and then I

just thought when I saw this when I saw

this I wanted to throw up here we are

and then on the right hand side you can

see I brought this up because this is

from one of our December podcasts when

all of you know the big players out

there put out their forecast for this

year and Goldman Sach was the first one

to lower it to to to this level and I

just think that this is crazy because of

course they could say there’s

uncertainty with the tariffs and stuff

like that of course they can look at the

consumer stuff saying they’re slowing

down but we are too and a half months in

and you’re all and you’re already Lo do

this in June or July for crying loud

yeah okay maybe if you want to make a

little bit of an adjustment there then

they’ll slightly pop it back up as oh it

looks like it’s going up so we’re going

to adjust it up and look we were right

on

track and then let’s just say that I

think the tires will have some impact

obviously but let’s just say they have a

mild to little impact or whatever these

things are going to go right back up

again and how many times have we do it

last year and most of these all revised

at least once last year y several

several twice I don’t know if that a lot

of them I think when we were having

those conversations a lot of them were

making the adjustment on the fly around

July or something like that or they were

looking at because I think a part of it

last year was a we were in the midst of

a presidential election and you had

right around July that’s when the first

the July August was when the first

debate was and then there was a lot of

uncertainty and they made some

adjustments but guys it’s we’re just at

the middle of March but here’s the

egregious thing and then you could go on

to your Trifecta

thing Trump was already elected in early

November they finalized their price

targets mid December he had been

threatening the whole thing with tariffs

before the election and post elction so

weren’t these going into the model in

some way former fashion also like I said

the majority of this has been a lot of

BS and Bluster that hasn’t even taken

effect yet and now they’re lowering it

yeah come on come on you don’t even know

yet yeah this is well you’re not

factoring in yeah you’re not yeah you’re

not factoring in that probably sooner

rather than later they’re going to get

some tax policy done it’s not going to

happen quick but it’s going to happen I

would think in the first half of the

year we’re going to get some tax policy

done we give some shity everything else

and once again just like we talked about

the beginning of

this all these companies I’ve seen this

game played out over and over they

sandbag sandbag sandbag and then oh look

how amazing we are we’ve had these

amazing things okay if you can’t predict

once again service companies if you

can’t predict based on these tariffs

okay you’re delivering a service or

you’re

delivering a software program it’s not

going to be tariffed it might be taxed

or something like that by the European

Union or something but it’s not going to

be tariffed so it has nothing to do with

it you should be able to predict what

your revenues are and everything else

don’t give me this BS said oh because of

these tariffs we just can’t even figure

this stuff out yeah whatever you’re

sandbagging 100% all right what do you

got all right I want to just share

something really quick and it’s

something that I’ve just been looking at

and looking at and interestingly enough

I I

reread the last few weeks the art of the

deal I’ve read that multiple times and

I’ve reread the art of the deal I I

just the media drives me freaking crazy

because they one they just hate Trump no

matter what I’m not always a big fan of

his approach to things but you got to

give the guy a little bit of credit

because he’s done a lot of stuff really

fast but I think you know what people

aren’t realizing is when you read the

art of the

deal effectively what Trump says in the

book is you punch somebody in the face

and then you Pat him on the back

and what what’s happening okay so let’s

talk about Panama Panama was okay

they’re going to be we’re going to take

back the Panama Canal blah blah blah

blah blah so then what happens right

after he gets confirmed Marco Rubio goes

down to Panama has some conversations

with them

and okay so they got punched in the face

Marco goes down there and calms things

down a little bit has some discussions

and then what happens Howard lutnick

over here has some discussions with his

white house or with his Wall Street

compatriots and what ends up happening

Black Rock goes in and buys out the Hong

Kong company that’s running those ports

boom sub yeah problem solved at that

point what happens punch Canada in the

face a couple times they start fighting

back blah blah blah blah blah what’s

happening today Marco Rubio’s up in

Canada meeting with his counterparts in

anticipation of the G seven what’s going

to probably happen Howard lck’s going to

head up there and start negotiating some

of this tariff stuff and all that

so these guys are really smart and a

good team and they work really

exceptionally together where you’re

seeing Rubio and Mike walls I think it’s

it’s Mike walls working together on all

this stuff so they’re working together

as a team I would say the only challenge

is going to be is you got you got a big

personality and Howard lutnick that

right now he’s on the game but is he

going to be on the game the whole time I

don’t know but some of this stuff is

okay you guys have got to just calm the

heck down let things calm down a little

bit personally with clients and my own

investment strategy we pulled a lot of

risk off the table at the beginning of

the month and it’s just wait and see let

the market I heard when I was when I

started in this business there used to

be a show called Wall Street week and

the guy who ran that show always said it

was the institutional children running

up and down the yeah ler yep Lou Riser

the institutional children are running

up and down the hallways with their hair

pulling it out and screaming and yelling

right now you just got to hang loose if

you can stay invested in the market as

Ron talked about last time if you can

stay invested and stomach it and not

watch it you’ll be fine just staying

invested if you’re like some of my

clients they were rather concerned and

they’ve got large amounts of money we I

had already made adjustments before a

lot of them even called me this month

because we pulled some things off the

table because I knew they they’re just

they can’t handle that those big

movements in the market gotcha now I

hear you listen it’s a freaking soap

opera and it’s every day is a new

episode just like a soap opera look I

don’t agree with a lot of what’s going

on I do agree with some things but the

problem is that yeah the problem is

nobody is used to the punch in the face

and I am I’m not a big Trump guy I lean

right in some areas when it comes to a

lot of this stuff and I always hated the

expression but this absolutely holds

true this expression you can’t make an

omelet until you break a few eggs yeah

and I don’t agree with a lot of the Doge

stuff because I truly believe if you

find stuff let’s go to a committee and

let’s just make sure it’s not two people

making a decision ision here let’s go

through it and if we truly need to get

rid of it then let’s get rid of it but

the fact that something’s identified

they make news of it let’s double and

triple check this I don’t see any I

don’t see any checks and balances here

so there are certain things that I do

and there are certain other things that

I believe that should have a different

approach for lack of a better way of

maybe politically glossing over what I

really want to say but yeah I think

there are different approaches some may

work some may different but nobody likes

the idea that hey we’re just ripping the

bandaid off yeah I think we’re for the

first time ever in my life that I can

ever

remember we’re actually looking at

downsizing the government a little bit

and how much it’s got good thing yeah

how much has gotten completely out of

control I love the I love the the thing

that they were talking about with the VA

and they’re like they’re reducing force

all that and it’s going to affect VA and

all that I’m like 880,000 people that

have been hired since 2019 none of them

were actually client facing people it

was just all bureaucracy behind the

scenes you know a lot of the government

hiring in the last four years has been

there to prop up the employment number I

don’t want to get political but let’s be

realistic I don’t care what side you’re

on the government is bloated but I want

to make sure we’re taking a scalpel not

a sledgehammer to the process absolutely

and I think now that you’ve got a lot of

these cabinet all the cabinet

secretaries are in place now it becomes

more of okay it’s their responsibility

to make these decisions not Elon or

anything like that elon’s really there I

think providing that team and I think

you’re seeing less and less of him being

that guy up front saying okay we need to

cut these programs and more of hey

here’s the stuff we’ve identified you

cabinet secretary figure out what it is

and I think you’re seeing that with EPA

Lee Elden really since the beginning has

just been like all right we’re going to

dig into this stuff right away and

figure it out and start running it I

think more and more you’re going to see

less and less of Elon being that one out

front and that Doge team behind the

scenes saying all right what’s there

what’s not what can we remove what can’t

we Linda McMahon hearing her the other

day if they want to shut down Department

of Education honestly I don’t think you

need to completely shut it down you just

need to pair it back to they do best and

running a portfolio of student loans I

don’t think they do best at all no and

there there’s an HR expression I learned

a long time ago they try and they really

don’t use the word downsize anymore they

call it

rightsizing and probably a lot of

government I mean yes it’s true it’s

glass half full half empty I just think

there’s so much that can be done all the

money we’re spending on a lot of stuff

can we not spend some of of that money

on technology and making things the

processes smoother and hopefully we’ve

got some people that are business people

running this stuff that think about

processes more and okay where we doing

three things just like the retirement

thing that we talked about a month or so

ago with with how many people can we

retire only $10,000 or 10,000 people a

month why because we’ve got all this

paperwork we’ve got to do and all that

why are we still using paperwork for

retirement stuff in

2025 and why are we storing all this

paperwork in a mine in Pennsylvania

probably because to keep to keep jobs

Hey listen last quick thing because I

know we got to go I was very

disappointed when I heard some things

remember the whole thing about the

potential Port shutdown last year yep

one of the negotiating things from the

union was they weren’t allowed to do

certain improvements support because it

would kill jobs then we found out that I

don’t even think I think we’re top we’re

not even in the top 10 in efficiency in

the world no in fact we’re in the bottom

why are the unions dictating efficiency

because probably that would also improve

safety so these are the things that

unfortunately people just unfortunately

drop their pants and just say look we

have no other choice here but here we

are less efficient less safe because

we’re keeping jobs that makes no sense

yeah that was the funny part because I

think we did a thing on that where we

did the top let’s say 10 ports and the

bottom 10 ports and we had more in the

bottom 10 ports I don’t think we had a

single one in the top 10 and the ones

that’s because of the unions now we know

I didn’t know that before all this shook

out last year part of their contract was

you cannot bring automation into these

ports and stuff like that okay so we’re

always going to be limited by humans and

it slows things down

absolutely and they have control over it

yeah I mean it’s crazy because you look

at some of the I think antp is the most

efficient if I remember antp is the most

efficient and it’s 90% of it is just

automation all the cranes and stuff like

that are all automated and that and even

the trucks that take the containers

offsite are like they’re self-driving

trucks and stuff like that and then it

gets offsite they pick up it with a

tractor and boom they go with a human

and a tractor they take it away but yeah

most of that internal stuff is run and

that’s what they don’t want because it’s

they’re really good paying jobs and it’s

been a history of people with those jobs

I hear you and if our podcast was an

hour we’d be be able to solve all the

world’s problems and it’s not so that

said folks thanks a lot for joining us

once again didn’t mean to get more

political than we usually do but I think

some of this kind of all falls into into

politics sometimes but what I would tell

you is calm down

relax adjust if you need to your

portfolios if not just let them let

sleeping dogs lie and things will all

improve probably when the next earnings

reports come out and they’re all through

the roof so thanks a lot join us the

next time make sure you subscribe and

we’ll see you again next time