Good morning audience. Welcome to

another week of the sense of things. Ron

and Jeff here. We’ve got a good show

today. We’re going to talk a little bit

about Ron’s done some research back

looking at the dot era versus now and

the comparisons and contrast that you’re

going to see. We’ll also be talking a

little bit about what’s going on

internationally with the

hopefully peace in the Middle East for

once in 3,000 years. We those of us that

have been around a while realize that

may or may not happen. A little bit of

talk about the government shutdown. I’ve

been getting a lot of questions and

we’ve been getting some questions on the

on the YouTube channel about what

benefits are still happening during the

shutdown, what’s going on and all that.

So, I’ll go through that really quick

with you. We’ll talk about the next

upcoming Fed meeting and last but not

least, what the market is pricing in as

far as interest rates going into next

year. So, stay tuned. We’ll be right

back on in just a second.

[Music]

Hey everybody, welcome to the show. Ron,

how are you my friend?

I am doing well. I can’t believe it’s

Q4. The weather here is fantastic. I’m

not sure how it is by you, but I got to

tell you, we always say never a dull

moment. It’s just amazing just the news

cycle. It just doesn’t stop. Even

through the summer, it doesn’t stop.

No, it used to be nothing happened in

the summer. And now it’s like with

program trading and everything else, the

market just keeps on chugging even if

people are in the Hamptons. But if you

even think about it too, you take a look

at historically at least that I remember

in the last 20 years, the government

shutdowns always create a down market

because of the uncertainty. Nobody

knows. Nobody’s I figured it last a

week. We’re just past a week now and I

don’t think they’re any closer. But

meanwhile, what’s going on?

Market’s still going up.

Yep.

It went down the first couple of days

and popped right back up. I’m mythed. I

wrote my in my Q4 newsletter. I call it

altitude sickness. And I’ve heard that

expression before. I don’t understand

how the market is at these levels. Just

doesn’t care what’s going on. Money is

just pumping in.

Yeah. And there’s still, when you look

at the cash position though, there’s

still a lot of money sitting on the

sideline still at this point. What point

do you And it may be we’re reaching that

where people are like, “Holy crap, I

can’t wait anymore. I’ve got to get into

the market.” and it just keeps pushing

stuff up even farther. I honestly don’t

know, but you can’t just sit on the

sidelines and wait and think that it’s

going to pull back because it just

isn’t. It’s been a pretty resilient

market no matter what’s going on.

Look, they say better than 70% of the

market is electronic algorithmic trading

in the market. But here’s the

difference. Forget about all the money

on the sideline.

just paycheck money and whatever is

coming up on the market because

nobody’s selling.

They’re just adding. Forget about all

the stuff in money markets and high

yield are getting under 4% now.

Every paycheck 10%’s coming out and

jamming into the stock market in most

cases into the S&P or the NASDAQ and it

just keeps pushing more money into those

those stocks that are there. And as long

as nobody’s going to sell or say, “Hey,

I’m going to take a percentage of my

chips off the table,” it’s going to go

up. All right. Where do you want to

start?

Why don’t we I want to kick off yours

and I know you’ve got your weekend this

week in the history or whatever. And

yeah.

All right. So, here we go. Actually,

some things I will say

anytime.

Yeah. Hold on. Let me see here.

Why don’t you take control right now?

Okay, let me see if I can share.

Okay, can you see that?

Go ahead. Yes.

Okay, cool. Let me uh just make sure

I got a lock up. I’m back, but go ahead.

Okay, cool. Okay, as of last night, is

the Israeli Hamas war over? Well, as

those of us that are realistic, it’s

never going to be over for Hamas.

They’re going to figure out a way to

come back at this point. However, at

least if you can stop the beating back

and forth for a little bit and get the

hostages back. So, what’s going on

overnight? They’ve signed off on the

It’s actually the 20 point plan. I

thought it was 21 point. 48 living and

dead hostages are be or to be released

by Monday. Israel is going to sign the

deal as of 5:00 p.m. today and ceasefire

takes place. Israeli troops will move

back to what they call the yellow line,

which is outside of where they’re at

currently. They’ll still be in Gaza, but

they’ll be pulled back and a ceasefire

happens. And then additional

humanitarian aid will increase

immediately. So that’s what we know

right now. That’s phase one. Phase two

then starts to get into the governance

of that area, the rebuilding that’s

going on. And fortunately, I think

there’s a huge interest throughout the

Middle East of people coming in to help

rebuild. When you figure the Qataris and

the Emirates alone have built massive

cities out of nothing, there there

should be they should be able to get

something built hopefully relatively

quickly so that people aren’t living out

there. Hopefully, we have a little bit

of peace in the world for a little bit.

The reality is most of these people have

been fighting for 3,000 years and I just

don’t see it changing overnight.

Yeah. Just to let you know, it’s been

almost 6,000. But that’s okay. But

here’s the other problem. Is the 48

living in dead hostages everybody that’s

remaining?

I don’t know. But I don’t trust Tomas.

So even if they do this, they’re going

to reneg on something else because they

want to remain in power. Part of the

deal is they’re no longer in power and

they won’t relinquish that. whatsoever.

Yeah, it’s a tough subject to talk

about. We’ll see what happens, but I

don’t believe Hamas will keep

I don’t either. They’ve been shown to be

just absolute distrustful, you know,

beat warrant disr.

[Music]

Yeah. Okay, shutdown day nine. What the

question I’ve gotten a lot of and

especially my clients that are saying is

my social security going to be affected.

Is my veterans benefits going to be all

that type of stuff? Am I going to be

able to go to the doctor? You need to

understand what gets funded by what? So

there are inside the government there

are required spending programs. Those

are things like social security,

veterans benefits, Medicare, Medicaid,

student aid, SNAP. Those are not

affected in any way, shape, or form by

these continuing resolutions. That is

that’s for discretionary spending within

the government. So, none of your

benefits in any way, shape, or form are

going to be affected by the government

shutdown. Law enforcement, public

safety, air traffic control, TSA,

disaster relief, and the military are

still working. Now, the sucky part for

them is they don’t get paid starting

next week. If I would say anything to

the people in Congress that are dragging

this out, you know what? People have

lives and they have to pay bills and you

guys are getting paid while they’re not

getting paid. So, get off your butts and

figure something out for this because,

you know, that’s going to start

affecting people and it’s going to start

affecting the rest of us when it comes

to stuff like air traffic control and

TSA. It makes it really hard to get up

and go to work when you know you can’t

pay your bills and you’ve got a mortgage

due. Government operations, mail

delivery, mail is actually a separate

agency. It pays for itself. Passport and

visa services just they just keep

raising the price. Federal judiciary,

Congress, and the president, they’re all

still funded. So they’re continuing to

do whatever they do at this point. But

and the other thing is if you own

treasuries, you will eventually get

paid. It’s just your interest is added

on to whatever period that you didn’t

get paid originally.

Yeah, exactly. So there there are some

effects. Essential services are still

being paid out at this point. Whatever

what is not happening during the

shutdown, I use a Texas term here per

near everything else. So economic data,

for those of us that are economic nerds

and enjoy seeing all the stuff come out,

all of that’s basically on hold at this

point. So there will be no economic data

until this gets back in place. And

usually there’s about a two to three

week lag once they get back to get this

stuff up and running again. So I would

venture to say we will have zero

economic data through the rest of this

month through October. So, you know, the

both the markets as well as the Fed are

flying blind a little bit. That said, no

government data at all is coming out.

You’ll get private data. So, you’ll get

ADP payrolls. We will not get the

employment situation. We will not get

unemployment, all that kind of stuff to

to get an idea of where things are

going. And trending, we’ve seen some

kind of bad trending data here recently.

So, it’s important to start getting that

data back. Next Fed meeting, October

28th through the 29th, they’ll make

their decision on October 29th. What are

they going to do? Odds are we’re

probably going to see a 25 basis point

cut. Again, at this point, if you were

to look at what the market is pricing

in, they’re pricing in between four and

five cuts out to June 2026.

Let’s say there’s no government data in

October.

Yeah. How can they justify doing

anything? Not doing anything or even a

quarter point cut.

Yeah, I don’t know. I think the market,

if you look at the futures market, if

that happens, we’re going to see one

heck of a downdraft in the market. I can

tell you right now because the Fed

futures rate or the Fed futures

expectations is a 25 basis cut by 97%

at this point in the future. They’re

looking at least one to two more cuts

before year end.

Yeah. Yep. Which would make sense

because you’re going to have October and

then December. We have no November

meeting. So, at the most we could have

two, but we could have just one if the

Fed sits back and says we don’t have any

data, so we just can’t do anything at

this point. So,

it’s going to be an interesting back end

of the month. I think it’s going to be

important to get some kind of data here

so that they can make a decision.

Although as much as they say they’re

data dependent, they’ve been flying

flying by the seat of their pants a

little bit, you know, claiming that the

tariffs are going to have impact, which

I see some impact, but I don’t see a

dramatic impact on the market myself. So

I hear you. All right, so let’s do one

this week in history. So first one,

1767,

Mason and Dixon draw a line dividing the

colonies, calling it the

Mason Dixon line. I did not know it was

that far back. I thought it was actually

in the kind of early

I actually thought it was in the 1800s,

but yeah, I never studied that one in

school. So,

I never Yeah, I never knew when it was

drawn, but that’s interesting. So,

1845,

US Navy Academy opens.

250th anniversary. Haha.

There we go.

1940, my Beatle Maniac Man John Lennon

was born. October 9th.

Yeah, I thought this was interesting.

1945, the first patent filed for the

microwave. And think about what we’ve

done in the last 80 years with the

popcorn and quick dinners and all the

other good stuff.

Now, here, let me give you a trivia

question,

okay?

What Hollywood star had a patent filed

for basically what we use for Wi-Fi

today?

Oh, I heard this.

Who?

Hed Lamar.

Absolutely one of the most beautiful

women of her time period and seriously

sickly smart.

Yes.

1956,

the first enclosed shopping mall opens

in America. Interesting.

And beginning the mall rat sensation up

until probably the mid 90s. I know. I

was going to say which is now died out

and

I know they’re all distribution centers

for Amazon and Best Buy now

pretty much.

I love this one. 1971 London Bridge

reopens after being dismantled in London

and rebuilt Lake Havisu. I saw this a

few years ago. If anybody is not

familiar with this, go to the Wikipedia

page. It’s a very interesting history.

And the quick story is there was an

American businessman. I think his name

was McAuliff

and after World War II,

London was rebuilding stuff, right? That

this bridge goes back a couple hundred

years and they were like they were

building a bigger London Bridge. What

are they going to do with that? Well,

let’s put it up for auction. People bid

a billion dollars, a million and a half.

And he said, “You know what? I’m going

to bid three million.”

uh because it’s going to call or he I’m

sorry. He bid a million and a half

because he thought it was going to be a

total of $3 million. A million and a

half to dismantle it and a million and a

half to bring it over and rebuilt it. I

think it ended up costing seven or eight

million. But when they built it out Lake

Havsu, there was nothing. It literally

they built an entire town and city

around the London

around London Bridge.

It’s literally on the border of

California. If you don’t know the story,

it’s actually a good five- t minute

read. You should check it out. Now,

here’s another interesting thing of this

week. 1973, Vice President Spiro Agnu

resigns,

opening the door for Gerald Ford to be

vice president, who then becomes our

president. And he’s the only president

in history who is never elected

president.

Another little

That’s interesting. Yeah. Because he

didn’t win his re-election after that.

So, yeah. Nope. Yeah. And he and think

about it. He was never actually voted by

the people to be vice president.

Correct.

1975

judge reverses the deportation order for

John Lennon. I don’t know if it’s Amazon

or Netflix. Has a really good

documentary on this that President Nixon

was trying to get him out of the country

because he was a subversive to to our

America. And they were trying to get him

on that one drug charge in London when

him and I think Paul McCartney had a

joint.

Yeah.

And they were trying to deport him for

years and it was just overturned.

Yeah. It’s just ridiculous.

50th year anniversary of Saturday Night

Live debuts. Wow.

I This has had its iterations over the

years of good and bad. Yeah. I miss I

miss some of the older casts. No doubt

about it.

Yeah. I pretty much we stopped I stopped

watching it somewhere probably mid 90s

when the Dana Carvey Phil Hartman

generation when they left it was like it

just it

Will Frell was there in the late 90s

I’m not a big Will Ferrell

yeah I’m not a huge Will Ferrell fan I

just

yeah just never have been he’s just

weird and I it’s the people who like elf

like that generation

my son was able to recite almost every

line from Step Brothers, Elf, and Anchor

Man.

There we go.

Hey, listen. I have a movie bucket list

that I give out to prospective clients

and clients, and I sent it out and

somebody called me one time and said,

“You’re missing a movie on your bucket

list.” I’m like, “What what am I

missing?” He goes, “The best Christmas

movie.” I’m like, “What? Which?” He

goes, “Elf isn’t on.” I’m like, “Elf is

a good movie, but it’s not a bucket list

movie.” Uh, that’s not a bucket list

movie. I’m sorry. Wow.

And 1975 for our third trifecta in 1975.

Born in a Run with debuts by Bruce

Springsteen.

The last good song that Bruce

Springsteen ever did in his entire

career.

I could debate you on that. Living in

Jersey for 20 years. I think he had a

few other good songs.

No, pretty much by 1990 he was done.

All right. He had a lot of good songs on

on the 84 album. You don’t think so?

Well, 84. Okay. So, by 1990,

he hasn’t had a single song since then

that’s been worth a crap.

All right, here we go. So, this is as of

June 30th. Here’s our sector

performance. Utilities is

utilities are shocking the world.

Financials have surprised me a little

bit. Yeah,

healthcare is down here and that was my

pick for the year, but actually I’m more

invested in the biotech space than the

general health care space. Although in

the last couple of weeks it’s really

popped up nicely. Um, so anyway, I think

this is pretty interesting looking at

this. We’ll see where we are at the end

of Q3. But yeah, the industrials, all

the potential reshoring and more money

going into building in America has been

propelling those stocks. We’ll have to

see if it continues because as we all

know, it ain’t cheap to build a factory

and labor is not cheap in the United

States.

No. No. Like I said, there’s a lot of

money coming in though. And some of that

some of this, especially in the

manufacturing space with the accelerated

appreciation and stuff like that helps

to offset some of that higher labor cost

and everything else. I don’t know. Yeah.

Once again, I think it’s always good to

have more people working and working in

good jobs and not just the service

industry anymore.

Well, that’s until AI and robotics takes

up.

Well, but I think that’s going to be I

think that’s part of it to begin with

with a lot of these new factories that

are being built. You look at Amazon.com

or Amazon. Yes, you have people that

work for Amazon or that are primarily

drivers at this point, but when you go

to look at one of their delivery

facilities inside, it’s all robotics

that are going on. And yeah, one of my

one of my friends that I interviewed on

my other podcast, the Freedom Nation

podcast a couple weeks ago, we were

having a we had a really long discussion

on robotics and stuff like that, and

he’s an engineer. So he was talking

about, you know, with Tesla and the new

robots that they’re building here in

Austin, you know, those robots when they

finally get them out and launched,

basically that will drop unit labor

costs down to a dollar per hour at that

point. So yeah, it’s not necessarily

going to create a ton of new jobs, but

it will create more manufacturing period

within this country.

Yeah. People just have to be retrained

on how to fix robotics and maintain.

Oh, and I mean, one of the largest

robotics trainers in the country is

Amazon because they want to hire people

in. They don’t need people to carry

boxes from one side of the h building to

the next. They need people that can fix

the robots when they break. I think

that’s the reality of it. And if you

think you’re just going to get a factory

job where you go in there and bolt stuff

together, quite frankly, a robot can do

that better. But what I would be getting

trained on or what I’d be starting to

train myself on is understanding AI,

understanding electronics and robotics

and stuff like that. That’s where you

want to put your education money at this

point.

I agree. I agree. All right. Couple of

other things. I thought this was

interesting looking at the NASDAQ 100

back from the mid to late 2000s to now.

And yeah, there there’s definitely some

similarities here, but I think the

better chart is this one. Looking at

this as of October 7th, and I think Jim

Biano posted this, and I borrowed it,

but if you take a look at the top eight

stocks, they may have a different

waiting in the NASDAQ 100 versus the S&P

500, but they have a very similar market

cap based on the waiting. And look at

this over here under the NASDAQ 100.

Those eight stocks is six almost 70%

eight out of 100 are almost 70% of the

move. And this is too high too.

Basically almost 40% if you add in the

top 10. The other two stocks to make up

the top 10. It’s over 40%. 10 stocks out

of 500 make up 40%. I believe that is

now that breached that level that is now

the highest in history. Look, it’s tough

to say. Do we have altitude sickness

just on these eight to 10 stocks?

Probably. But they’re profitable.

They’re making money. They’re increasing

their top and bottom line. So, how can

we really say, hey, they’re overpriced

because they are growing into their

multiple.

It’s pretty interesting. And you think

of it just even looking at Apple, it’s

not all AI because Apple just finally

freaking figured it out with AI a little

bit. So I mean it’s Yes, Nvidia is all

AI stuff. Broadcom is part AI, part cell

phones and stuff like that. I mean it

these are companies that are making

money. Yes, I think we’re going to get

to a point where they start to outpace

their ability to earn. But when you see

every quarter these guys are banging out

with massive size companies still

banging out 20 or 30% earnings growth,

that’s pretty dang impressive because it

with the size of some of these things

where they’re getting close to being

trillion dollar companies, some of them

are,

and still able to crank off 20 or 30%

earnings growth. That’s pretty

impressive.

Oh, I agree. And but the other

interesting thing, I know I brought this

up on another podcast, that

30% plus or minus of Nvidia’s revenue is

from four companies. Microsoft, Google,

Amazon, and Meta. And I know Apple’s in

there somewhere, too. But 40%. So if you

think about the top eight, Nvidia is

getting 30% of the revenue from four of

the other companies.

From four of the other companies. Yeah.

Isn’t that kind of cannibalizing

a little bit of that? I don’t know.

Yes.

And is it just a land grab to say for

every two chips that I buy, you get

zero? I don’t know.

Yeah. But I think one of the interesting

things is this week you saw that that

AMD and OpenAI have got a partnership.

Now, I will tell you, I’ve always been

an Intel guy. I’ve every PC I’ve owned

for the last 30 years has had Intel

chips in it. I just got a new laptop

that’s got the AMD Ryzen chip in it and

the Radeon chip. I’ve never had a better

computer in my life. These this thing is

faster than all get and AMD used to be

junk, but they’ve got something

together. So, I think that’s going to be

an interesting thing to see AMD. I I

think they’ve got the ability to

challenge Nvidia a little bit going

forward. They just don’t have the juice

right now as far as size of company that

Nvidia does. Nvidia was a really small

company 15 years ago. And I think AMD’s

got it figured out. And that becomes

another alternative for a lot of

companies that say, “Hey, the Nvidia

chips are more expensive, but if I can

get something very similar from AMD,

does that start to move some of that

number off of the at least the Nvidia

side?” I don’t know. I don’t think it’s

there yet, though. Nvidia’s just got the

animal spirits right now.

No, I agree. I agree. Until next week.

Yeah, exactly. But the week after I’m

going on vacation next week.

I got you.

All right, guys. Thank you for joining

us on the show. We’re here for you

always. Please, hopefully this helped

allay some fears and answer some

questions for you. We will see you guys

back here on the very next show.