COT 166 === [00:00:00] Good morning, folks. Welcome  to another episode of The Cents of Things   with Jeff and Ron. On today’s show, we’re  going to cover a little bit of everything,  

talking about some of the history  of what happens when stocks unlock.   This is really important when you  start to look at stocks like SpaceX.

We’re gonna talk a little bit about  earnings season and a whole bunch of   other things for today, so stay tuned.  We will be back on in just one second

Hey, everybody. Welcome to the show. Ron,  how are you, my friend? Good. Starting to   feel the fall weather, which I’m  really happy about. Oh, I know.

Earning season’s about to begin next week.  Yeah. And the main earning season’s next week,   and can’t believe it’s holidays coming  up already. But I gotta tell you,  

I [00:01:00] can’t wait till these elections  are over. Oh, I know. These, the commercials,   the texts, everything else  has just been super brutal.

I don’t know what it’s like by you. It’s gotta  be the best. Oh, it’s… Yeah, it’s… it, it   used to be- Everybody’s the devil. Yes. They’re  evil. They’re horrible … everybody’s the devil,  

and everybody supports pedophiles. Yes. Oh,  I know. That’s what we have here in Texas   with our attorney general that, the, the other  candidate is just pounding on all this stuff.

And I’m like, you… What you’ve done  is you’ve actually made me go, “Okay,   let me look into the details of all this  crap.” And, when you read the details,  

I’m like- Of course … “Okay, I…” “Okay, no,  you’re lying,” basically. So you’re… Now you   just pissed me off even more. Yeah. But this  is part of the problem that I’ve always had.

We can move on. Yeah. And I’ve been saying this,  I don’t know, for as long as I can remember   political commercials. If you or I wanted to have  an ad on TV for a product- Yep … it has to be  

vetted to know that it’s a legit product-  Absolutely … and that your claims are   truthful. [00:02:00] Absolutely. Why have they  never ever had a law for that on political ads?

Yeah. I don’t get it. I don’t  understand that. Yeah. Yeah,   they can basically say whatever they wanna  say, and you’re just supposed to accept it.  

And like I said with the ability to do  research easily with AI and everything now,   I’m like I read… I take everything  at face value and then look it up.

Because you’ve now made me go, “Okay, I wanna  understand who you are as a candidate,” on   both sides of the coin, and then I make my  decision from there. But yeah, I just… The,  

the negative, it used to be if you did  a negative ad, you kinda, kinda screwed   yourself. Had your own And yeah, and in today’s  world, it’s like that’s acceptable completely.

And how about telling me what you’re  actually going to do? So what you’re   telling me- They don’t wanna do that …  is, yeah, what you’re telling me is you  

have no solution. The, you just wanna get  in. They just wanna say, “This person’s bad,   so no matter what I say-” Yeah, so vote  for me … you have to vote for me.”

Yeah. My favorite thing is I saw it more  so two [00:03:00] years ago, only a few   this year- that the posters or whatever, they  get like the opposition and they grow they put  

de- devil ears- … and a pitchfork t- and a  pointed tail on the person. On all the, they   go around all the posters. Seriously? I haven’t  seen too many of those like this, this term.

I don’t think I’ve seen them any this  ti- I may have seen one or two of the   postcards I get in the mail. Or for the female  candidates, they go and draw a mustache on  

them. Yeah. Just, just brutal. Yeah, it’s like  a four-year-old. Yeah. The, I list- I know,   not to go on, but I’d say 25 years ago I  always thought, hey, if I ever got to a  

certain point with business and a certain  amount of money, but I’d I’d love to- Yep have my civic duty and go into politics.  Yep. And I won’t tell the story, but I had  

a neighbor that was running for the mayor  of the town I was living in, and I’m like,   “There’s there’s no way he could win.” He was  a nice guy, but he shared some of his views.   I won’t say which side he was for,  but the other side always got elected.

So I think he [00:04:00] was like the  patsy. Yep. And he didn’t get elected,   but I had heard him talk, and I’m just like,  “I don’t want any part of this.” No. Oh,  

no. No. I my I was very involved with  politics here in the area for quite a while,  

and I always said I don’t wanna be a politician,  I wanna be rich enough to own politicians.”

Oh, boy. So that’s my goal in life,  is to m- have enough money to own   politicians. All right. All right, here  we go. This week in history. So actually  

there were some pretty interesting things, I  will say. Yeah, I- 1863, I did not know this,   President Lincoln proclaims- Huh … official  Thanksgiving holiday. Weren’t you aware of that?

Yeah, I knew he did it, I just didn’t  know it was like right in the middle   of the Civil War. Yeah I, it was just  interesting. I didn’t know… Actually,  

I didn’t even think about who the  hell started it or who proclaimed,   I didn’t even know. Yeah. 1908, Ford  Motor Company unveils the Mo- the Model T.

Wow. There we go, and the rest is history.  [00:05:00] 1920, I thought this was interesting,  

Scientific American reports that radio will soon  transmit music to the home. It wasn’t too far off.  

You don’t have to get those big horn Viola RCA  players. Nope. 1927, work begins on Ro- Mount  

Rushmore. Okay. We’ll see if Tr- we’ll see if  Trump commissions for hi- the fifth face on there.

There we go. 1946, war Nazi war criminals  sentenced at Nuremberg. I gotta tell  

you- Okay … some of these mockument- not mocku,  docu-movies that they’ve made- Yeah … have been  

horrible. Yep. Some of the original  documentaries I saw were incredible.   One was really good. Actually, 60 Minutes  interviewed one of the original lawyers.

He was only 23 or 24 at the time.  Brilliant guy. He was in his late 90s 10,  

15 years ago. Sure. Shar- sharp as a whip, right?  Just talk slow, sharp as a whip. But it was just  

very [00:06:00] interesting. If you go back and  watch the documentaries on this versus the movies,   which are obviously all drama-based- it’s  it’s very interesting how they were able to  

collect this information, ’cause one  thing that the Nazis were they were   meticulous about their data. They documented  everything. Yeah. That was their downfall   is they their Germanic nature of documenting  everything came back to bite them in the butt.

Yep. And that was the other thing,  too. That’s why they tattooed   numbers on, Yeah … on the prisoners, the  Jewish prisoners. Crazy. All right. 1947,  

I thought this was interesting.  Yeah. President Truman delivers   first ever presidential speech on TV. It was  probably watched by 100 people because- Yeah

TVs really didn’t start to really make the  way into the home until the ’50s. And if   anybody, e- everybody had, what, one TV  set that was an 8 to a 10-inch circle.  

Yeah. Inside a ginormous cabinet that  was a, like a piece of furniture. Oh,   absolutely. It was a credenza.  1949, East Germany- Okay

created. Lasted- All right … what, 40 years?  [00:07:00] Yep. East Germany lasted about 40   years, but the wall lasted, what, 35. Yep. I  always thought this was fun when I was a kid.  

I still have a book I bought about five, six years  ago, but the Guinness Book of World Record debuts   in 1955. What I always thought was interesting  was why would anybody buy this every year?

Yeah. Every five years, okay, 10. Yeah, there’s  a few new records here and there. Here, now here  

is- Yep … here is a, This is, yeah, it’s like  the almanac. What are you buying that for every   year? Like- Yeah. Here’s a, I have met- …  it’s 99% the same information … yeah. I  

have met two Guinness Book World  Record holders in my in my life.

Met one the first guy to climb all seven  summits, the, the seven major summits of   the world. Wow. Sat next to him as we  were talking about first class. I was  

flying up to Denver and sat next to him,  and he was one of the founders of Snowbird   Resort. But he had climbed the seven…  He’s the most interesting guy, right?

He never stopped talking for three and a half  hours. I didn’t get a [00:08:00] word in edgewise,   but, and then I- And that’s somebody that never  had a nine to five job. Absolutely. And then I I  

interviewed on my other podcast the first woman  in the world to climb the seven second summits.   Wow. So both were w- both were Guinness World  Record holders, so just weird little, points.

So let me ask you something, Jeff. Do you  feel special? I do feel special. Okay. Look,   that’s all that’s important. I gotcha.  1958, I thought this was interesting,  

American Express launches its first credit  card. Wow, okay. And it’s interesting, in   many ways you never wanna be first  because think about it. Try to sell  

this to businesses that take this credit  card and out of faith I’m gonna pay you.

Yeah. Back then it took a week or two  to get paid. Yep. And then they had   to convince people, you don’t have to  carry cash. It took what… Actually,  

think about the ATM card was  actually developed in the late ’60s,   early ’70s. But it wasn’t really until the  ’80s people had faith in it. ’80s, even ’90s.

I don’t remember [00:09:00] having a… I  remember writing checks really up until the   early to mid-’90s, and then I don’t think,  beside… I write more checks now probably  

than I ever did, but, Yeah … but it’s mainly  for business than anything else. Yeah. But try   and convince people to use it, but business to  say no, we will pay you,” like anyway remember  

the c- the gas credit cards, they used to  have- … those books they used to have   to thumb through to make sure the credit c-  Yep. As long as the number wasn’t in there,  

but how long did that take, the process  of transaction? Oh, I know. That,   and remember the big swipey thing that,  you know- Oh, yeah, with the carbon copy you put the card in and choo-choo. They had to-  Yeah … you had to get… You, and you got the  

pink copy. 1959, The Twilight Zone premieres on  TV. Nice. Now, I can’t remember, I think it’s  

Cozy TV, they run it. I actually record them all.  Now- Really? … I gotta tell you, you go back and  

watch it, for as many programs as you can go back,  like you could say The Honeymooners and The Lucy  

Sh- like how much they ch- but really The Twilight  Zone really changed TV because if you think about  

the [00:10:00] originality, the uniqueness  of it- to and the, how it made you think   and thought-provoking between treating people,  and the aliens, and foreigners- Yeah … and it  

was always interesting- it was just, it was such  a creative- Or, I wish I was rich, and then they   make somebody rich and they’re miserable.  You know- Yeah … little things like that.

But, if you ever read about Rod Serling,  an amazing guy. So the show was brilliant   when it was a half an hour, and  they used to do, think about it,  

today they only do 22, 23 episodes. On  streaming they do, what, 12 episodes?   10, Yeah … 10 to 12 episodes. Back then,  they were doing 35 to 40-plus episodes a year.

So think about all the content he had to create,  and I think after three or four years- … they   said, “We want an hour show,” because they  wanted more- Yeah … commercial time.  

The guy was smoking three to four packs of  cigarettes a day. He was having- Yeah … nervous   breakdowns, and eventually, ’cause he  was the main creator of the content- Yeah

and he died at 51 in the early ’70s.  He died, I think, ’74. But the guy   was [00:11:00] just brilliant, for him  to come up with- Yeah … think about  

how- just- … it’s like Stephen King.  Like like- Yeah … how you gotta think,   like how nobody else does. Yeah. Yeah, ’cause  you’re not telling a normal kind of story.

You’re telling something completely off the  wall. Yep. Yeah. Not o- not only that, too,   the other thing I’ll just quickly make  about Twilight Zone, when if you go back,  

all the huge stars- That got their start-  Started … in an episode. Robert Redford,   Burgess Meredith, Jack Klugman, you go on and on.

You’ll just, “Oh my God, he was in that?”  You just- Yeah … watch these people and   you’re like, they’re, like, in their  early 20s just getting their start,  

and they play- Sure … an interesting role  in the show. Cool. Yeah. That’s awesome. 1962,   Johnny Carson takes over the  Tonight Show from Jack Paar.

Yep. And Jack Paar only did it for two years,  and he I think the original story was creative   differences and he was bored with the  show. It was really- … weird things.  

But he actually was a guest on Johnny Carson  several times, but- … you never heard from   him really again afterwards, [00:12:00] no.  Johnny was the right guy for it, he just,  

he was- Jack Paar was a little more  serious. He was more of a little, Yeah,   Jack Paar was too serious. Johnny could- Like Mike  Wallace, Walter Cronkite kind of guy … Johnny   was still serious, but he could have, he had a  lot of fun, and he was, he’s just genuinely a,   a funny dude with that kind of dry sense of  humor that he had that was just hilarious.

He was made for it. He was made for  that. He was made to emcee. He hung   out- Yep … with the Rat Pack,  remember, in the ’60s. Yep. He  

was the one that introduced and he was the  foil in a lot of their stuff. Sure. 1965,   Gatorade first tested in college football game  by which college football team? Florida Gators.

There you go. And 1966, the first dump of Gatorade  over a coach’s head. I don’t know. What color was  

it? I’m joking. Yeah. That’s actually a prop  bet is- I think it was all green at that time,   wasn’t it? Probably. Today, they  actually take bets on what color,   if it’s green, purple, or orange or something.

Yeah. Anyway, 2011, Steve Jobs passes away, and it  was interesting, right? Because Cook just stepped  

down- Yep … in the last [00:13:00] month. And I  gotta tell you the quick story about Steve Jobs,  

not to kinda d- b- I’ll go, keep going  through this. But he was so into holistic  

medicine that- … he actually later said that  he should have done chemo and everything- Yep

radiation a lot earlier. I don’t know if he  would’ve had a full life, but he would’ve had   an extended life because he went all over  the world looking for holistic medicine,  

and if nothing else, it probably made it  worse or metastasized it even more it’s a   shame. It really is. Yeah. Okay. Because  it’s coming up, and we were just talking  

about it in our pre-show midterm elections, as  nasty as they are, they’re typically September   and October are the weakest months of the  year, especially during a midterm year.

One year later, here we go. The  average, the, the… has been up 14.4%,  

and we- Yep … can see here the last several  midterms haven’t been great. They haven’t even   hit the average since [00:14:00] 2002. I  can’t say next year’s gonna be different  

because here we are. This could be the  fourth straight year of double-digit gains.

This would- Yeah … only be the second time at  least four years in a row in 76 years. Can we,  

could we have a fifth next year? I,  I- Yeah … ai ai, ai. I don’t know,   man. What’s on the other side of the rainbow  here? I’m not sure. I don’t know. It’s funny you,  

you see the… I did a, a show for my daily  read, which is a daily show that I do every day,   and I’ve, I did a show on, the, the  absolute opposite ends of the spectrum.

Monday, there was an analyst that said,   “The AI boom is the beginning of the amazing  time,” and all this. And then Michael Burry,  

whose only thing he’s ever called,  and he started calling it in 2004- Oh,   he’s called more than just the, he’s called more  than just- Yeah … the mortgage crisis yeah.

Yes and no. He’s been wrong a lot- He’s  been better on the downside than he has   been on the upside … yeah, he’s been wrong  a lot more than he’s been [00:15:00] right,  

and he had one or two big things, so a broken  clock’s right twice a day. But he’s calling,   “Oh, the, the AI is so overblown.  The world’s gonna end,” and all this.

And I’m like, it’s somewhere in the middle.” Yes,   we’re gonna see a correction at some point.  I just don’t know when. You- you’re- you’ve  

got so much going on right now, and there’s  so much going on inside the AI side that I,   I think we’re gonna continue to climb a wall of  worry for I don’t know how long at this point.

I think until the presidential election. We  got two years to go. Yeah. All right. So I   thought this was fun because I still have  clients asking me about SpaceX. I thought  

it would’ve been sub 100 by now. That’s  just my opinion. It got as low as 104.   But one of the reasons behind the thesis of  it, the valuation just being absurd, right?

Basically it’s looking… I- it’s  trading at a valuation of where they   expect sales to be 10 plus years  from now. Yeah. But here we are,  

if you just [00:16:00] look at- This is where  the unlock periods are for employees, people  

that own ins- for insiders to possibly share,  sell shares. Look at June and July of next year.

Yeah. Now- Boom … Musk isn’t going to be  selling a significant share of his stock,  

but just look between now and then, right?  You’re gonna be doubling from where we are   right now- … the amount of  shares that could unlock. And,  

a lot could happen in the next 12 months.  I’m not saying- Yeah … we all know that   a lot could happen, but that is a crap  load of shares that’s floating out there.

Your thoughts? Look, and look at May  2027. That’s the one where it’s like,   okay, if you wanna see, if you wanna see  SpaceX underperform in, at any point in time,  

when that huge unlock happens in May of 2027, that  is gonna… ’cause I don’t blame these guys. If,  

if I had, if I was in that [00:17:00]  situation and, a bulk of my wealth,   it’s what I advise my clients that, that are, have  RSUs and things like that you need to diversify.

You have to diversify. Yes, it’s awesome that  you’re, that you’ve become a millionaire, but  

you gotta diversify out, ’cause, yes, keep some  because it’s gonna probably continue to go up. I,   he pretty much is the smartest guy in the room,  and he figures out how to make money all the time.

So I think we’re- and here’s my  prediction. If not by next summer,   I think by the following summer, I don’t know,  I don’t think it’s necessarily gonna happen,  

but I think the chatter is going to get louder of  SpaceX and Tesla merging- … especially as the,   as, as the lion’s share of the shares u- unlock.

Yeah. That’s just my thought, because  at that point, there’ll be a lot of   volatility with share price, so he’ll  go, “Screw it. Let’s put it together.”  

Yeah. I don’t know if that’s a fact or  not- Which- … but you know how he just   loves to [00:18:00] rail on the people that,  that that love to short his company, yeah.

Yeah. Go ask Bill Ackman how it feels. I think, I  personally think, yes, Tesla’s an awesome company,   but I personally think the, the future is  really the SpaceX side of things. ‘Cause,  

it’s space, it’s AI, it’s, you merge Tesla into  it- Starlink … it helps him stay focused on  

what he does best, which is trying to create new  and better things, yeah. Yeah. And you got robots   in there someplace. From what I understand- from  what I understand, he’s bored with Tesla cars.  

He’s more focused- Yeah … in on robotics  and whatever, and that’s fine. Which is the   next thing. But remember what happened with  SolarCity, right? Yeah. He owned SolarCity,   and he saw that the shorts were against it the  the federal funds were drying up to subsidize.

He merged that together with Tesla.  Yeah. A lot of people don’t realize   that’s still part of Tesla. Sure. So I-  I have a Tesla Powerwall on my house,  

so yes. So Warren Buffett is  stepping down. The man is turning 96,   God bless him. W- Charlie Munger was only a few  months shy of his 100th [00:19:00] birthday.

Warren might make it. He might- Yeah … make  it. The reason why I think one of the re- also,   he always talked… do you know he in- it was  a great, by Walter Isaacson, I listened to the  

audiobook. He actually incentivized his kids  specifically the oldest one to stay in shape.

And he actually said- Yeah … “I’ll give  you money if you stay in shape,” and he   never did. Warren- Yeah … for the most  part, I know he’s been struggling walking,  

but mental acuity, the man still gets up every  day. He re- he reads. And, some of the pictures   and video of him in his office, do you know  the one thing that’s missing in his office?

Computer. A computer. Absolutely. ‘Cause he is  a computer. And obviously he can call somebody   to get a quote- Yeah … or maybe it’s  in the other room and he goes to use it,  

but yeah. He doesn’t- Yeah … have a  computer in his office. Yeah. He do-   and he doesn’t invest for where the quote is  today. He might look at the price where it is.

He looks at a company and goes, “Okay I’m…  we’re gonna be holding this for 20 years,   so yeah, I we better love it where it is today  and then go from there.” [00:20:00] Look, and past  

results are not indicative of future results,  right? But, you know- There you go … but,   this is amazing, and it was a different world, ’64  to 2000 certainly, or ’64- to ’94. Yep. And then  

even since ’94, it’s a very different world  because you got ETFs, you got more funds,   you got more thematic investing. Back then  it was, some mutual funds and single stock  

picks. So it’s very different. And it’s funny,  I actually just looked this up this morning,   ’cause I was looking up a Warren Buffett  quote and I was just like, I wanna say…

I was trying to remember what he’s paid himself,   and I looked it up. And so he’s s- for  the last four decades, he’s paid himself  

$100,000 per year, no stock incentives, no,  … no dividends on the stock, no no bonuses,   anything like that. It’s just $100,000 a  year. Now, he can sell stock anytime he wants.

So this was what always made me laugh when  he would talk about my secretary pays more,   in taxes than I do.” Of course she does. Obviously  what [00:21:00] he’s not telling you, that’s his  

salary. Yeah. He didn’t say what his distribution  was- No … what he’s making on dividends. He   doesn’t say that all his expenses are being run  through the business, yeah. Yep. So I get what  

he’s saying, but- Yep … he’s also cooled  his jets on that too. Yeah. Last slide here,   I thought this was interesting. We’re talking  about just CapEx expenditure. C- I know it’s a  

little bit of a busy chart, but, the interesting  thing is that just the capital expenditure- From  

the hyperscalers is half of the S&P earning-  ePS growth. And- Yep … this is outrageous.  

Obviously, one of the positive things  about this is they’re not necessarily   borrowing this money to do it. Yep. It’s  coming out of earnings, which is where  

it should be. But are you… obviously  they’re reinvesting back in the business,   which is what you wanna see, which was a huge  difference from back in the dotcom era, right?

Where basically, i- they didn’t have the  revenue, they didn’t have the earnings,   and it was [00:22:00] all funny money.  They were either borrowing it or they  

were issuing stock to pay for it. Your  thoughts. But if you… if you’ve watched   the news the last few days, you’ve  got Oracle They’re over-leveraged.

Yeah. But you got Oracle, you got SpaceX, you’ve  got a couple of the others that are spending a   bunch of mon- or they’re actually going out to  the markets, not in the bond market, but they’re  

going out to borrow additional money to be able  to continue to make their capital expenditure.

So that’s something, I think, to  keep an eye on it- Yeah … for sure,   going forward. Yeah. Here you go. All right.  Let me let me share mine real quick here,  

and- so earning season, as Ron said,  earning season is starting. Actually,  

technically, if this morning was the first  beginnings of it. We’ll talk about that in,   in a second because it’s really two chip  stories that we’re gonna talk about there.

But line up, traditionally the kickoff is Delta  Airlines, which Ron and I were talking about.  

Neither of us has ever invested in an airline.  I have no [00:23:00] intention to. The, the key  

tie… The what made me think of this was what  made me think of of Warren Buffett this morning   was I remember reading a book about him and him  railing on, hi- his investments in airlines.

He’s always– He’s invested in  them because they were value plays,   and he’s always lost money every time he’s  done it, and so he calls them a bottomless  

pit. But I found the funniest quote that  I’ve ever heard him say and he would say,   he said, “A farsighted capitalist at Kitty  Hawk would have done his successors a huge  

favor by shooting Orville down right out of  the gate and not allowing airlines to exist.”

But yep, so we’ll see at Delta tomorrow. Next  week will be the big banks, so we’ll get a,   a feel for the market in general  because, of course, the big banks,  

we’re gonna see what the consumer looks  like, but we’re also gonna see trading   volume and everything else with all these  integrated banks that we have out there.

[00:24:00] Later on in October, that’s  when we get the big tech guys. So right   around Halloween time, we’re gonna  start seeing all the big players,  

and there’ll be about a two-week period of time  actually running right into the election week   where we have all of these big tech plays.  So we’re probably gonna see some- Yeah.

I think NVIDIA’s late November. They’re one of  the last. Yeah. Yeah, they’re usually one of the   last. But, you’ve got a lot of these big guys. Y-  you’ve got the hyperscalers that are front-loaded   in there, and that’s really what’s gonna  affect everything ’cause that, goes downhill.

So we’re definitely gonna see what they’re gonna  continue doing. So things to watch coming up. This  

is, if you’re investing for yourself, going into  earnings season, these are the things that we are   watching, basically. Can AI keep delivering? Is  the consumer holding up? How are the banks doing?

So all of those things are really gonna be, I  would say, the theme that I’m looking at going  

into this season. And the rule that I have is  watch the guidance and the [00:25:00] reaction  

to that guidance, not just what the headline is  ’cause the headline a lot of times- Reports, and   then you’ve got all these bots and everything else  that start to, place trades and things like that.

But it’s really what the reaction is  over a few days after that. So today,  

one of the ones I wanted to talk about,  it’s the tale of two sets of chips,   Taiwan Semiconductor and PepsiCo.  And this is … it makes me laugh  

a lot of times because Taiwan Semi blew  the doors off, 51% up, blowout quarter.

But of course, it’s priced for perfection, and  that wasn’t enough, so the stock actually fell  

right out of the gate today. PepsiCo, which  is a disaster area we are in the world of  

health with all these GLP-1s and all that, and  they’ve cut their outlook. Layoffs were looming.   It was a really rough quarter, and  it rose 2% right out of the gate.

The only bright spot that they had  going for themselves [00:26:00] is   the healthy snacks because even people  with GLP-1s, they wanna have some kinda  

snack. So all the healthy snacks actually  did reasonably well. And all their baked   cardboard chips and everything else, that was  the thing that was the, the big deal today.

So it … Y- you just have to kinda look  at this, and not really look at the day of  

or even the week or so following, but you  wanna look at what’s happening with these   companies. The thing I would say with Taiwan  Semi is everything funnels through them,  

you have all the other chip companies, but it’s  really them that manufacturers most of the chips.

So if we see continual, continual  investment in chips and everything else,   Taiwan Semi’s gonna do fine over time. Thoughts,  

Ron? You know- I think Taiwan Semi has, in my  opinion, don’t laugh, the GE problem from back   in the day. Yep. They were too big. [00:27:00]  Yep. They’re the biggest, they’re too big.

And I had said this years ago, and when  it happened, I got three calls. I said,   “The only way GE’s ever really gonna make  money and be substantial again is if they  

break up the company.” Yep. They broke  up the company. And it worked great.   Dow surprised me when they broke up. But  with Taiwan Semi, they are so big, right?

And they do 100%, compete with some of the  other ones that have done much better than  

them. But I wonder if they are just too big.  Yeah. And it’s like moving the cruise sh-   it’s like making a course correction  on a cruise ship versus a speedboat,   that they’re a victim of their own success.

Yeah. I was just looking at their chart.  They hit an all-time high la- or Monday, and,   you know- … earnings, it was probably, they ran  up into earnings and then pulled back. Yep. Yep,  

absolutely. But it’s j- it is, it’s like investing  in a big battleship, it just keeps plodding along.

And every time I- the one thing they are is a  cash cow, so they should increase- Yep … the   dividend. Yes, they should. But they don’t  want to. All the- And they’re spending a  

fortune to move [00:28:00] operations to  out in your neck of the woods, aren’t they?   Oh they’re, it looks like 10 or 15 airport  hangars together, and they announced- Yeah

they’re making it bigger. Yeah … actually,   it’s got a dividend yield of .8. I wanted to look  it up. Okay. And if you look at the earnings,  

it’s been going up quarter after quarter. Yeah.  It’s just insane. And here’s the amazing thing,   ’cause this is one of my indicators,  the PEG ratio, price earnings to growth.

Anything under a 1.5, 1.5 is a buy. Anything  under a 1.0 is a strong buy. Yeah. Taiwan  

Semiconductor is .65. Geez. It’s just a  machine. It’s just, it’s a ginormous cash  

machine. It… Once again they’re the choke point  for most of the, the chip building world, and,   hopefully once they get that plant out  by you up and running fully, that’s…

It’s like Samsung here. There, there was this, the  town that Samsung is here literally was a railroad  

town, [00:29:00] and there was nothing built in  that town for 100 years. And then all of a sudden,  

now everything is going in there at this point.  And Samsung, same thing. It’s probably two miles   long of their building that they’re  in, like Tesla here in Austin, too.

Yeah. I just think you know what? I think there’s  still gonna be a flush-out in the next 30 days,  

3 to 5%- … I don’t know. But if so, Taiwan  Semi is one of those you gotta seriously look  

at. Yeah. Especially if it pulls back. I’m looking  just at a technical level. If it pulls back to-

45 40, 4- yeah, about 40, 40 whatever.  I think that is probably a good spot   to check it out. Yeah. But why wouldn’t  you? It’s a cash… And then by the way,  

and I saw, they’ve been raising dividends every  single year. Yeah. So they are raising it,   but the stock price is not- They’re  just not raising them that much.

Yeah, they’re not taking a bunch of  their profit out and pumping it into   there. They’re, they just pump more money into,   “Okay, how do we make more chips?” [00:30:00]  ‘Cause I think that’s where they’ve gotta be  

at this point. One of the- how do we expand  production? … one of the things they’ve   got up here is they’ve got a they’ve got to build  another possible aquifer up to Colorado for water.

Yeah. That’s the other thing that people are  talking about. Yeah. I would say- And we got the   Intel plant, too. That’s southeast of Phoenix.  Yeah, both. So we got both of these. So net,  

net, I hate to say it, we are ground zero  for a bomb. I’m just saying. Yeah. We got   Luke Air Force Base. We’re…  I guarantee you when they are   in full production there is gonna be  a little bit of a military presence.

There has to be. Sure. Has to be. And that’s…  I think that’s the reality with so much of this,   when you have so much production in these  areas, yeah, it’s a huge risk. And in  

today’s world with drones and everything  else just like that, the whole thing,   and we don’t really know all the details with  England there, but obviously there was something  

very credible for them to pull back, a bunch  of bombers and everything else out of there.

Also that could have been a little  bit of a chess play. Yeah. Yeah. We’re   moving [00:31:00] out. We’re not gonna  be able to protect you. Step up and bend  

to our will. Yeah. I don’t know. Just saying.  Yeah. Maybe build a navy. You used to have the   biggest navy ever. Now you can’t even fill a,  a soccer stadium with the entire British Navy.

Just saying. I know, yeah. All right, folks.  Thanks for joining us. We are here for you,  

and we put these shows together for you, so  make sure that you subscribe to the channel,   and we will see you guys back here next week