COT 128 ===

Jeff Kikel: [00:00:00] Good morning folks. Welcome  to another episode of The Cents of Things with Ron  

and Jeff. We are here for another week, and  we’re coming up to the end of the year and  

coming up to our, annual spectacular spectacle  of what goes on, what our results were for the  

year as far as our estimates and how the other  parts of the market just changed everything.

And they just keep adjusting their targets to  make themselves look like they’re really smart.  

But. We’re gonna have a show before that,  which is today. So Ron’s gonna talk to us a  

little bit about what is going on in the kind of  history. He’s gonna talk a little bit about the,  

or give us an update on something he gave us a  little while back on the cost of creating coins.

And he’s gonna talk about the cape ratio. I’m  gonna follow up with some economic data from  

today. Talk a little bit about what we have coming  up next week from an economic data [00:01:00]  

standpoint that might move the market. So stay  tuned. We’ll be right back on in just one second.

Jeff Kikel:  

Hey folks, welcome to the show, Ron.

How are you, my

Ron Lang: friend? Good morning.  Good morning. Doing well. I know  

you just had another trip around the sun  yesterday, so congratulations. Thank you,  

sir. Appreciate it. Hey, when you were a  kid and you were this close to Christmas,  

did you get double presents or they just said,  nah, we’re just gonna combine it for you?

Jeff Kikel: Yeah, that was more of it,  I’d get like one present for my birthday,  

that was just a Christmas present that they’re  like, ah, we’re gonna give him this one. But yeah,  

I’d get, I was the only kid, but I’d typically  get maybe two to three presents for my birthday,  

and then all the rest of  it came at Christmas time.

Ron Lang: Gotcha. I actually had a friend of  mine that was born on [00:02:00] Christmas.  

He said it was a good and the worst day of  the year. Yeah. ’cause all their all their  

siblings got double gifts in the year and the  only the other. Yeah. And they’re just like,

Jeff Kikel: oh here’s your  Christmas gifts and birthday gifts.

Great. Thanks. I gotcha. All right. You  ready to get started? Yeah. Why don’t  

you go ahead and cover your part of it there  with what’s, what happened in history? Yeah.

Ron Lang: This week in history actually. The,  because I go day by day in this one website,  

and the first couple days were a little  light and that it picked up pretty good.

Okay, 1690, the first paper currency  is authorized in the colonies. And I  

thought this was interesting because the  backstory to it, which we can’t get in too  

much detail. It’s like all the colonies  had different currency and and then it  

had the British pound and they had a very  tough time trying to do the crosses being,  

like foreign currency. Yeah. And they decided  to do their own before Ben Franklin came in late  

many years later and actually developed a lot of  what is actually still on our [00:03:00] dollar  

today to make it that unique. So I  thought that was pretty interesting.

Jeff Kikel: It’s interesting.

I, I would’ve never thought it was that early into  

the country. ’cause they were all just  colonies of the British at that point.  

So it’s interesting that they were  issuing their own currency too. Yeah.

Ron Lang: 1835, the Texan Army captures San  Antonio. Yep. It’s interesting, Texas is,  

next, well after Alaska, our largest  state as and I just thought it was  

interesting that there was a Texan  army back then. Yep. Even though,  

Mexico kind of ruled, a good chunk, especially  the southern half of Texas at that time.

Jeff Kikel: Actually, if you  to be absolutely accurate,  

we were called the Texans At that time. We  were Texas Mexicans, so we were the Texans.

Army. I think I saw

Ron Lang: that on the menu at  a restaurant down there. Yeah,

Jeff Kikel: actually we have a restaurant called  the Texan here, so Yeah, it’s, that’s exactly it.  

But yeah, it, what I don’t think what people  realize is, people think of the Alamo. Yeah.  

It was just like [00:04:00] they captured  the Alamo and then that, the battle happened.

But yeah, they had captured it, months  ahead of time and finally. Santa Ana decided  

to come in and wipe ’em out. It didn’t  quite work out so well for the Texans,  

but it also didn’t work out  so well for the Mexicans. No,

Ron Lang: certainly

Jeff Kikel: not

Ron Lang: today. No. 1869. I  thought this was interesting.

Wyoming grants women the right to vote,  and here’s ING’s the backstory to it.  

They wanted to attract more women to the  state because at that time it was like  

a six to one ratio of men to women. And  they thought if they gave women whatever,  

we gotta do the right to vote, it  would attract women to the state.

I’m thinking to myself, wow. Those must have  been some boring Friday and Saturday nights,  

that’s for sure. Absolutely. Yeah. The  guys all dancing together apparently. 1913,  

the stolen Mona Lisa is recovered in Florence. So  anyway, it’s a little, it’s a little premature,  

but Dick [00:05:00] Van Dyke was born this  week and he will turn 100 this Sunday.

Wow. Yeah, man. And he’s still going  pretty strong from the last I saw.

Jeff Kikel: Yeah, I saw him like, what,  two years ago They did that special,  

this is your life, Dick Van Dyke and  yeah. I mean he’s still, yeah, he looks  

a hundred, but I mean he’s still chugging along  and still had that, the wicked sense of humor.

He is always had so

Ron Lang: well, he is also got  a wife that’s 40 years younger  

than him. I think that helps too.  1946 UNICEF founded. It’s funny,  

I haven’t heard. The term the name UNICEF in  many years. But I remember when I was a kid,  

you had to bring in a nickel and put it  into that milk, that orange milk carton.

One time I put in my lunch money ’cause I  felt guilty ’cause I didn’t bring in a nickel,  

and the teacher got very upset because she had to  open the damn thing up and gimme my money back for  

lunch. Oh, I was so embarrassed. I remember  I was like six years old or seven years old.

Jeff Kikel: [00:06:00] Whatever it was. Yeah, I,  

God, I, it’s been forever since I’ve even thought  of unicef, and to talk about how much we are of

Ron Lang: capitalist pigs. Yes. On 1969,  Soviets declare, nudity a sign of western

Jeff Kikel: decadence, decade.  If you’ve seen some Russians,  

they’re pretty hairy dudes. Yeah, I  think that’s a little, so are the women.

Ron Lang: Yeah,

Jeff Kikel: that’s true.

Ron Lang: So I had to bring this one in.

1977, Saturday Night Fever premieres  in New York. I gotta tell you,  

it’s held up over the decades. But here’s  the thing. If you took out the soundtrack,  

it’s not a great movie. Oh, it’s a terrible  movie. But the soundtracks awesome. The  

music held up after an eighties, maylay  against them. The music still holds up

Jeff Kikel: today.

It does. It’s great. It’s a phenomenal  soundtrack. It’s kinda like my feeling  

about Grease too. The movie is eh, but the  soundtrack is phenomenal. Which will just

Ron Lang: tell you how amazing Barry  Gibb more the other two brothers had,  

definitely a [00:07:00] part  of it, but Barry Gibb was.

By far the, the core sound. She’s a  machine songwriter and musician there.

Jeff Kikel: Yeah. And the fact that it drives  my wife crazy if I ever play it. So it’s just,  

it’s amazing to, I, I do it just to annoy  her at that point. So when you talk to her,  

does she put on Jive talking to piss you off?

No. No. She hates disco I’m pretty  good and I like all of it. It’s not

Ron Lang: all disco.

Jeff Kikel: I like all of it, man. It’s  the soundtrack of my childhood, alright.

Ron Lang: 1978 millions stolen  from JFK. Oh yeah. From infamous  

Hanza Heist. And what movie was  everybody reminded that about?

God for Goodfellas, right? Goodfellas 1990.  Yep. Henry Hill. Absolutely. 1979. I was not  

aware of this. Smallpox has officially declared.  Eradicated that was big around the turn of the  

century. Yeah. I didn’t realize that it was  still trickling out there into the seventies.

Jeff Kikel: Who was, and now here’s the good part.

Who was [00:08:00] responsible for reducing  smallpox in the American colonies? Probably  

somebody famous and I don’t remember who,  George Washington. Oh, is that right? He  

had his entire army inoculated ESP  during, in Valley Forge actually had  

him inoculated so that they were not  having that, issue. So it that’ll have

Ron Lang: to come up soon because I’m on episode  two of the American Revolution on PBS, so yeah, I,

Jeff Kikel: that one’s, I  know Ken Burns is a great.

Director, all that. But god dang, he puts  some of the most boring things out. I will  

say I was getting bored in certain parts.  I love history, but I was getting bored

in certain parts. I was watch they had a run of  

Ken Burns things and I’m like  I hadn’t watched a lot of ’em.

I’ve watched like the baseball one and the  Civil War. I started watching him and I’m like,  

you know what? If it wasn’t for PBS, this guy  would not have a career because nobody would pay  

any money to actually watch this [00:09:00] stuff.  I will say baseball and, yep. Ben Franklin were

Ron Lang: my

Jeff Kikel: two favorites.  Yes. Yeah. Ben Franklin.

I learned so much about Ben Franklin from  that, that I just, and people don’t realize how

Ron Lang: amazing person yeah. He was. He never

Jeff Kikel: held political  office. That was another

Ron Lang: amazing thing.

Jeff Kikel: Nope. Besides,  being part of the Continental  

Congress. That’s about it. Yep. Wow. John

Ron Lang: Lennon. Wow. December 8th.

Yep. John Lennon was shot and killed  depriving us of who knows what. Yeah.  

1983 Scarface opens in theaters. What  was the most famous line from that movie?  

Say hello to my little friend. That’s  right. And do you know who one of the  

screenwriters. Was of that movie. I have  no clue. Whatchamacallit. Oh my God.

Who did platoon?

Jeff Kikel: Oh God, I don’t  even know that. Oh, oh, oh. JFK,  

all those. Yeah. I’ve got him in my mind  and I can’t think of his name. Oh my god, I

Ron Lang: can’t believe

Jeff Kikel: it.

Ron Lang: Yeah. Anyway, so he [00:10:00]  actually had a small screenwriting credit on  

there. And then Sodom Hussein was captured this  week, so I thought that was pretty good, Adam.

I’m sorry, I gotta look it up. I’m,  yeah. Oliver Stone. Oliver Stone. My god,  

I can’t believe that blew my mind. Anyway. Okay.

Jeff Kikel: I was covering you, bud. I  was Googling brutal, like crazy, brutal.

Ron Lang: And I’m a movie guy. Oh, so you did  this, you spent a year and a half though, because  

I used to do this in opening all my seminars  and workshops and have a good time with it.

Go back, stop for a second.  You gotta go back. You missed

Jeff Kikel: Madoff in there.

Ron Lang: Oh, I’m sorry. Yeah. Madoff was  

arrested. Geez. Slime. One of  the biggest cons of all time.

Jeff Kikel: Yep.

Ron Lang: Okay. And that could have been stopped  at least 10 years before, but that’s another old  

thing. And it’s funny ’cause I think if it was  stopped 10 years before the fund actually grew,  

I think four or five x since that point  where it could have been stopped anyway.

Yeah. [00:11:00] So I, these  numbers went up. We knew that  

the penny cost almost three times the amount.

Jeff Kikel: The

Ron Lang: nickel was around 10 cents at one  point. I don’t know when it got to 1378. And  

I always knew it was cheaper to make a dime in a  quarter. But they’re stopping to make the penny,  

but they’re not taking ’em outta circulation.

Jeff Kikel: No. It’s so funny, like all these  stores are like, oh, make sure you’re paying  

by credit card because we, pennies are  in short supply. I am like it’s not like  

they’re being taken outta circulation.  They’re just not making any more of ’em.

Ron Lang: But you know what, you brought  up something that reminded me of something.

I didn’t understand this. Remember during COVID  there was a shortage of pennies? Yeah. What the  

hell occurred that all of a sudden. No pennies.  Could be fair. People were hoarding pennies.

Jeff Kikel: Yeah.

Ron Lang: I still to this day, I  don’t know what happened there.

Jeff Kikel: They had their piles  of pennies, toilet paper, and,  

bread, I don’t know, whatever  it was to [00:12:00] keep alive,

Ron Lang: I know. All right. Okay my last slide  here is on a good but a forgotten factor called  

the Cape Ratio, which is basically short  for cyclically adjusted price earnings.  

So we know what price earnings is. On,  on a particular company or stock. It’s  

looking at basically the valuation  of its stock price to its earnings.

The higher the number, obviously the  potentially more overvalued and more  

expensive, though the lower the number, the  more undervalued or the cheaper it looks to  

potentially buy. And I thought this was  interesting leading into kind of where  

we are going at the end of the year that.  We are like the highest since the.com era.

And I know we’ve done some comparisons  the.com time to now, and obviously now  

we’re dealing with more profitable companies.  I’m not saying this is ominous. ’cause there,  

it is a different this time. I know how we hate to  say that. Wanted to get your [00:13:00] thoughts  

on it because it’s, this isn’t like a 10 or  a 20 year chart, this goes back 150 years.

Jeff Kikel: Yeah. I don’t, yeah, I don’t think  anybody denies the fact that the market is highly  

valued. I, what concerns me with this is once  again, it’s it’s calculated by dividing the  

current price of the s and p 500 by the 10 year  moving average of inflation adjusted earnings.

Okay. The almost 30% of the market is in about.  Seven to 10 stocks at this point. So yes,  

those stocks I think are wildly  overvalued at this point. But the  

rest of it really isn’t. And if you look at  the performance of the rest of the market,  

if you scrap those, seven to 10 stocks,  it was a y year really across the board.

So I, I think this calculation worked when it,  the market was, had a lot more breath to it,  

it’s not, I don’t think [00:14:00] working  very well in today’s world. And I think it’s a,  

an interesting. It’s an interesting dichotomy  that we’re in right now, because yes, market is,  

the stock market’s gone up like crazy  over time, but what’s gonna pull it down?

Because a vast majority of the money is  coming in passively and going into the  

s and p. Every week is a 401k contribution  and everything else. So what’s gonna cause  

a mass shift downward? At this point, so I  don’t know what to tell you. And, it just,  

it’s one of those things where I’m  like I just don’t know where the  

market reverses and goes back down or  what’s gonna cause it to do that, but.

It keeps going and really everything  else is not really getting love like it  

should be at this point. Think there’s  still a lot of we don’t forget too,

Ron Lang: even during the.com time. Yeah. More  than half of this move is from the top 10 to 15

Jeff Kikel: stocks. Yeah, absolutely.  Which I think it always is that way.

I think a lot, there was a lot more,  especially during the [00:15:00] dotcom time,  

there was a lot more. I think  financial engineering going on of,  

oh, okay. Anything that had a a.com in  its name or anything that was technology  

oriented. It’s somewhat like today with  the ai, issues that we have with ai.

Anything that’s related to AI or anybody that’s  adding ai, oh my God, we’re gonna push the stock  

up. But I think Oracle had. Pretty crappy  earnings today, and that’s a big AI play.  

And I think we’re starting to see some of that,  but but I think there’s a lot of other stocks  

with some love and that I’m gonna share some of  my thoughts on this as we roll into next week,  

talking about some areas that I think  are gonna be interesting for next year.

You gotta stay tuned for those. Alright,  let me share a little bit of my screen  

here and a couple of economic things that  I wanted to share for this week. All right.  

Can you see that Ron? Now I can, yeah.  Okay. Not a whole lot of economic data  

out this week. We’re rolling into  the end of the [00:16:00] year.

The government’s still trying to get data coming  in. Of course, we didn’t even talk about the fact  

that interest rates were dropped by a quarter  point yesterday. Of course the Fed chairman,  

Mr. Data dependent, except when he wants  to go by gut feel. But he said that,  

we’re gonna have to look at data for next  year and maybe just one interest rate drop,

Ron Lang: whatever.

They’re always data dependent.

Jeff Kikel: He’s data dependent until he is  not, which is that’s the thing that annoys me,  

is we’re data dependent, but we think that because  of tariffs, okay, follow the data. Stop following  

the fricking your gut feel because your gut  feel sucks, which it has for quite a while.

Data coming out today, jobless claims that  kind of affected the market right out of the  

gate. Consensus had been that it was gonna  be about 219,000. The range was 2 0 5 to 2  

32. We came in at 2 36. I started looking  at what might have caused that or what,  

what may have caused a bigger [00:17:00] pop there  and started to just do a quick search a little  

quick Gemini search came up with, and I, I heard  these and it just didn’t really resonate with me.

But late October, November, companies like  Amazon, UPS, Verizon, Amazon cut around 14,000  

corporate roles as it focuses on ai. That, it’s  an interesting thing with them, it was not the  

worker bee, the people that work in the, like  distribution facilities and stuff like that.

This was straight up middle management folks that  got wiped out because of ai. And I think that’s,  

it should be a concern for people in that  area. You better be making yourself useful  

when it comes to AI because they’re  looking for ways to eliminate those.  

UPS eliminated 14,000 management jobs, plus  34,000 operational roles for efficiency.

Verizon, 15,000 cuts, which is the largest in  their history. HP announced 6,000 cuts by 2028.  

This could easily be [00:18:00] explained  by Amazon and UPS ’cause that was right  

now and I think there’s just a little bit of cross  

a lot of companies of continuing to  build a little bit of efficiency in.

Ron Lang: What’s your thought,  Rob, other than Verizon? The rest  

of it is minuscule in the grand scheme of things.

Jeff Kikel: I, like I said, Amazon and UPS  are really the biggest. All these other ones,  

they’re like GrubHub shed 500 jobs. Okay. Which  is 20% of their workforce after being acquired.

Okay. Really didn’t, I guess it’s gotta be

Ron Lang: W2 employees, not Oh. Yeah. Not the

Jeff Kikel: drivers and stuff like  that. They still need those folks,  

but I think you get acquired, they’re  gonna look at the fat that’s in the  

company or the roles that are, common or whatever.

One thing that I. Found intriguing and  interesting is, of course we’re talking  

about the tariffs and their effects on trying  to kinda rebalance what’s going on in the,  

in trade, because [00:19:00] we’ve really seen  a lot of it go in the wrong direction for us  

as a country. And this, this was something  that came out on the econ day calendar that  

I’d not heard anybody talk about in the,  in the media or anything like that, but,  

international trade goods and services. Prior  59 negative 59 billion. Or it’s probably,  

yeah, it’s 59 billion. Consensus for this  time was negative 64 with an a negative  

85 to negative 57. And we actually came in  at negative 52.8. Now that’s still a lot.

It’s a long way to go to get us to where  we’re a little bit more balanced in trade,  

but the trend is moving in the right  direction, which is good. And it was,  

it started, good at the beginning of the year  and got really good and then we had that summer  

weirdness going on in September and it’s been  moving in the right direction, which I think is,  

I think it’s a positive [00:20:00] move, at  least on our part as a country that we’re  

trying to balance out, trade a little bit  and get some of our goods sold overseas.

And last but not least just what’s  coming up next week, it’s gonna be,  

we’re going into the holiday season. We’re  one week out from Christmas next week. Not  

a whole lot going on except for two, what I would  consider big numbers and one interesting number.  

One, the interesting thing is  Empire State Manufacturing.

I always pay attention to these  manufacturing reports because  

they really tell us where we’re gonna  be. And a few months down the road we  

also have us un or we have US  employment and US unemployment,  

which actually comes out every week. Hourly wages  hourly wages, year over year in retail sales.

Which. If I’m remember correctly, this will  be retail sales for October and not November  

yet. So we don’t really know kind of what Black  Friday and beyond is. And then the other one,  

the biggie next week is consumer  price Index. So we’re gonna start  

to get a, [00:21:00] another look at  inflation, and this will be the third  

read on it prior to the finalized number that  we’ll get after the beginning of the year.

Ron Lang: Any thoughts? Yeah, actually  they were announcing, was it yesterday,  

earlier this week? That. Some of the  economic numbers from October won’t be

Jeff Kikel: released until next month.  Yeah. They’re just catching up. It was  

such a long shutdown that it takes ’em along. I

Ron Lang: just don’t understand in this  day and age with computers why it takes  

so long to accumulate these numbers because they

Jeff Kikel: are so massively inefficient

Ron Lang: at doing this.

I don’t get it. I know we talked about  this before, but you gotta be kidding me.  

I know that. And not only that too,  but a lot of the information they get  

is verbal, yeah. They’re calling up states  and local municipalities and they’re giving  

them a number, and there’s no way to  back that up if it’s even real or not.

I just don’t understand it in today’s day and age.  

I know I sound like an old conjure,  but Yeah. You gotta be kidding. But

Jeff Kikel: it was the same thing. I didn’t  even realize, [00:22:00] how they do some of  

these surveys and things like that. Yeah. And I  was like. Because I had an SBA loan at one time.

If you had an SBA loan, you’re automatically  on that list of. Companies that they send a,  

like a, they would send a questionnaire to  me once a quarter and I always answered ’em,  

and then it got to the point where I’m like,  why am I answering it? Because they don’t  

explain what it is. They just send it out  and go, Hey, we wanna know what’s going on.

Okay, great. Is this because you  just wanna know or is there some  

reason for it if they’d explained, Hey,  we use this data. For, reporting stuff,  

but they did such a job, a bad job of  selling why I should do this. What’s  

the benefit to me as an investor  or a, business community member?

What is this thing? Why are you, yeah, why are  you giving me this? Oh, okay. If you tell me,  

yeah, this is how we gather economic  data to use. And it may be in there,  

but it was. Amongst the 5,000 tons  of, legal gobbly goop that they  

put in front of it. It’s, [00:23:00]  that’s funny. And not only that, but

Ron Lang: all states and many municipal,  they all do their numbers differently.

Yeah. It’s basically like a federal election  in the States. They all have their own rules.

Jeff Kikel: Everybody’s got their own  way of doing it and how they report it,  

and when they report it, and it’s political. Yeah,  and it’s political, but I think a lot of it’s,  

some of them it’s we don’t gather the  data until the end of the quarter.

That’s probably why you get all these  weird readjustments and everything else,  

because nobody’s doing it co consist. And if  the government would just come in and say,  

you know what guys, we need this info.  Can follow these very simple guidelines,  

please. It’s all we need from  you, and in this day of computers,  

this should not be, this should have  been fixed. Back in the early 1990s.

Ron Lang: If they wanna create efficiency,  why not start with economic numbers? Yes,

Jeff Kikel: absolutely. ‘

Ron Lang: cause think about it.  If they created the efficiency,  

how many people could we eliminate  and repurpose them for something else?

Jeff Kikel: Yes.

Ron Lang: It’s ridiculous

Jeff Kikel: but that’s the biggest  [00:24:00] problem. They don’t want to  

be re repurposed for something else. They  want to just continue to do it the same  

way they have job security. We don’t have  a computer. Computer, you have to call and

Ron Lang: ask me for it. Yes,

Jeff Kikel: there is. Yeah. I am  secured in my world where I cannot be.

Yeah. Cannot be changed. And I think it’s  interesting because you got a bunch of of  

heads of, different agencies and stuff like  that, that are efficiency people. So hopefully  

over the next three and a half years we’ll see  a little bit more efficiency in that world. And,  

maybe updating the computers from  like the early two thousands.

To to current computers and, super computers.

Ron Lang: Hey, we got the chips, right?

Jeff Kikel: There we go. We got ’em.  Gotta spend money. Alright, until

Ron Lang: next week, we got the big market  outlook and some details. So a little bit of

Jeff Kikel: foreshadowing. So stay tuned.  You gotta be here for next week. Make sure  

you subscribe to the channel, make sure that  you give us an upvote and let us know that  

we’re doing a good job, and we will see  you guys back here the very next time.