COT 131 ===

Jeff Kikel: [00:00:00] Good morning folks. Welcome  to another week of the Cents of Things with Jeff  

and Ron. This week. We’ve got all kinds of  information. We’ve got economics where I’ll  

do a little bit at the backend talking about  what’s going on with interest rates and what  

I. You know what? I could make the case on  interest rates where we don’t see a drop for  

a while which Ron and I have been talking about  only a couple interest rate drops this year.

Ron’s got a bunch of stuff on the markets  today. He’s got his this week in history  

and a lot of just fantastic stuff. So stay  tuned and we will be right back on with you.  

Hey everybody. Welcome to the  show, Ron. How are you, my friend?

Ron Lang: Good. I think we still got  a holiday hangover. Who? Who knows?

Jeff Kikel: Hey man.

Got a holiday coming up on Monday, baby.

Ron Lang: There was a big debate. I  know we talked about it last week.  

Like when do you stop saying happy New  Year. I haven’t heard it this week.

Jeff Kikel: Yeah, I only one this week, and  that was somebody [00:01:00] I hadn’t seen  

since the beginning of the year  that worked here in the office.

So that was Hey,

Ron Lang: listen, my favorite holiday of  the year has nothing to do with religion.  

It’s Valentine’s Day. I know it’s St.  Valentine’s Day, it’s all about love  

and smiling and giving chocolate. Oh, what are  you gonna do? So that’s coming up in a month.

Jeff Kikel: Mine is mine is St.

Patty’s Day, okay. So the  patriot saint of drinking. So

Ron Lang: yeah, that is one night. That is  one day I do not drive after four o’clock.

Jeff Kikel: That’s new Year’s too. I just  don’t get on the road at all on New Year’s,  

and I don’t get on the road on on St. Patty’s

Ron Lang: and Christmas Eve and Thanksgiving Eve.

Jeff Kikel: Yeah, having spent a lot  of my life up in the Boston area,  

St. Patty’s Day is just  absolutely nuts up there, so

Ron Lang: I’m sure in Chicago,  they turn the river green.

Jeff Kikel: Yeah, they turn the river  green. Yeah, exactly. Actually greener. They

Ron Lang: can’t

Jeff Kikel: get greener than it normally

Ron Lang: get the pollution outta the  water, but they can turn it green.

Jeff Kikel: Yeah. Yeah. It’s greener than it  

normally is. It usually is a pale  shade of green to begin with, but

Ron Lang: that’s true. All  right, you [00:02:00] ready?

Jeff Kikel: All right, man. Let us go.

Ron Lang: All right. All right. Not a lot  this week, but a couple of interesting things.

Jeff Kikel: Okay.

Ron Lang: 1908.

We

Jeff Kikel: had our over blow last week.

Ron Lang: Oh, I know.

Crazy. Right? 1908 president Theore  Roosevelt declares a Grand Canyon  

National Monument. I don’t know if you’ve  ever been, I’ve been there a handful of  

times considering Arizona is the Grand  Canyon State. Yeah. And I gotta tell you.  

I don’t meet a ton of native Amazonians,  meaning everybody’s from somewhere else.

But it’s just amazing to  me when you talk to people,  

they’ve never gone to the Grand Canyon.  Yep. This is like when I lived in New  

Jersey and you talk to people in New Jersey  and New York. And they’ve never gone to the  

Statue of Liberty or Ellis Island. Yeah,  I know it’s there. I see it. Okay. Yeah.

But you still gotta go. Meanwhile, people  come from all over the world to go. It  

just it’s nuts. Yeah. Alright. 1942 President  Franklin Roosevelt ordered [00:03:00] aliens,  

enemies to register. Which was a very  broad definition and led to a lot of  

regrettable things such as the internment  camps for Japanese and other things.

Jeff Kikel: Yep. Adolf Hitler, 1943, declares  total war against the Allied Powers. Another  

brilliant decision by him. Yeah. And three  years into the war at that point, so yes,  

Mr. Brilliant. You know what, that kind of  surprised me when I read that. Yeah. Because  

I thought after the US declared war  on the Japanese after Pearl Harbor.

Yep. Hitler. Immediately I thought the Germans  were on us, but I guess that, I guess he just  

declared it against us on at that time or  whatever. But I guess I, I don’t know if it was 43  

wasn’t that the year that they went into Russia?  That was the beginning of the fight in the St.

Peter part. Another smart.

Ron Lang: It’s

Jeff Kikel: brilliant. I, yeah, really worked well  

for Napoleon. You should have  known a little history there.

Ron Lang: 1954, Marilyn Monroe,  marries [00:04:00] baseball star,  

Joe DiMaggio. I think that lasted a year.

Jeff Kikel: Yeah. But he never  stopped loving her, that’s the

Ron Lang: thing. No, he was the one that, when she  died, he paid for the funeral and he was there.

He says I’m gonna take care of my wife.  That was basically, maybe not verbatim,  

but pretty close to what he said.

Jeff Kikel: Yeah.

Ron Lang: 1961, Alan Shepherd becomes  the first space traveler. I think he  

literally went in the sub orbit  and came, I don’t even think he,  

I don’t even think the whole thing. I don’t  think he was up there for more than 30 seconds.

Jeff Kikel: No, it was, he was like  a ballistic missile at that point, so

Ron Lang: definitely.

Jeff Kikel: What else does Alan  Shepherd hold the record for?

Ron Lang: It’s gotta be something before he became  

an astronaut. Something with I don’t  know, something outta do in a play.  

Did he I know he didn’t break the  sound barrier, but what did he do?

Jeff Kikel: Nope. It was actually as an  astronaut. He is the first astronaut ever,  

or first human being to hit  a golf ball on the moon.

Ron Lang: That was Alan [00:05:00] Shepherd?

Jeff Kikel: Yeah.

Ron Lang: Okay.

Jeff Kikel: Yeah, he was a huge golfer  and he was like. They made him like this  

little stubby short golf club and he  hit, he said he hit the longest drive  

of his entire life when he when  he hit the golf ball on the moon.

Ron Lang: Very interesting. You are correct. I  just verified that. But I do remember the video.  

So 1967, the first super Bowl one o Of course,  

they didn’t call it Super Bowl. I,  it was just just Super Bowl. So it

Jeff Kikel: was like champion game  or something like that. No. And a

Ron Lang: little fun and a little fun side fact.

Who came up with the name Super Bowl and why?

Jeff Kikel: I don’t remember.

Ron Lang: Okay. Lamar hunted because  his son was playing with a super ball  

and was bouncing it and he just said  after the ball games with college,  

a super. Ball became Super Bowl.  Look it up, folks. It’s true.

Jeff Kikel: Okay, for for Kiel family history,  my parents’ first date was Super Bowl number one.

Ron Lang: Oh, is that, did [00:06:00]  they keep the ticket and the programs?

Jeff Kikel: No. ‘Cause nobody, it was  like, okay, this is this weird thing.

Ron Lang: The stadium wasn’t  even full, is it the LA Coliseum?

Jeff Kikel: It was like half full. No. Yeah,  it was the Coliseum. The roll. Yeah, it was the  

Collos, yeah, I guess it was the Coliseum. And  yeah, I mean it was like, it was cheap ticket.

They just went for the heck of it because  it was something different. But but yeah,  

that was their first date with Super Bowl one.

Ron Lang: Nice 1991 Operation Desert Storm  

became the be began with the  start of the Persian Gulf War.

Jeff Kikel: Yep.

Ron Lang: I thought that was  February, but it was January.

Jeff Kikel: Oh no, it was January.

Trust me, I was sitting in the desert there for

Ron Lang: nine months and  one of my favorite resources,  

although you can’t be a hundred percent  with it, Wikipedia launched. Yeah. And  

I had to identify created by Jimmy  Wales and Larry Sanger. And this was,  

if you think about it, this was almost like  the first social media, not necessarily

Jeff Kikel: Yeah.

Ron Lang: Sharing of personal information.  But if you think of social media, where.  

Basically [00:07:00] people added to this,  it wasn’t like a company was just adding it,  

it gave the ability for other  people to add information.

Jeff Kikel: Yeah. Yeah. And it, it’s basically  community based. Information creation.

Ron Lang: Yeah. It’s not a hundred  percent, but it’s still good information.

Jeff Kikel: Yep. Sully

Ron Lang: 2000 2009 Miracle on the  Hudson Sully Berger landed successfully  

US Air Flight 1549. When that happened, I  told people There’s gotta be video. What  

do you mean? I said the same thing with  in nine 11. There are cameras everywhere.

Yeah. And it was amazing at some  of the camera angles that were on  

the buildings for security, how  it was getting at landings. So

Jeff Kikel: yeah. It was amazing. And it was  

amazing. I watched something recently. It  was a documentary about this whole thing,  

and it was amazing how fast the  like the ferry operators Oh yeah.

All got together. It was like, it within  just minutes, they were all like, okay,  

we’ve gotta get out there to  the [00:08:00] plane and stuff  

like that. The plane didn’t sink right  away, but but yeah, the ferry operator

Ron Lang: was heroes that day. Actually, good  segue. That’s where I was about to go to.

You learned a lot. About an airplane because if  it lands on water, there’s a something that the  

pilots pull as almost like flotation devices in  order to make the plane float for a period of  

time. But obviously the ama, the most amazing  picture was all the passengers on the wing.

Eventually it did sink. Yeah.  But here’s another little fun  

side fact. US airwaves was not  responsible for the luggage.

Jeff Kikel: Okay.

Ron Lang: People are like, Hey,  want my luggage? It was about,  

they put, we’re not responsible for it.

Jeff Kikel: Yeah. It’s not our  fault. We didn’t do anything.

Ron Lang: No. Okay. So a couple quick charts.

I love my charts. Yep. Rolling.  60 day s and p returns now so far,  

earnings has been sporadic this week. They’ve  been good. The next three weeks will be very  

telling. I got a couple more [00:09:00]  charts on some of the EPA estimates,  

but this is not a good sign.  I think we all know that.

Maybe we’re, we’ve been ahead of our skis  for a little while. But obviously if we  

see the EPS growing and that comes true,  that means we’re growing into a lot of the  

PE with a lot of these stocks. So we’ll  have to see what happens. Your thoughts.

Jeff Kikel: I think next two weeks is  gonna be a lot of the big AI slash,  

tech players and stuff like that.

It’s funny I started looking at, that, like  I said the investment strategy I developed,  

and it went. A little weird and wonky  this month, as far as what it did. And  

I’m like really happy about that. ’cause I don’t  really have a lot of exposure to the tech stuff.

We talked about that. Yeah, it’s not been  looking good on the tech side and once again,  

they’re poised for absolute perfection  and if they don’t get absolute perfection,  

I think they’re gonna get punished pretty bad.

Ron Lang: Yep. And then that’ll be a flush  out. Good time to go in. We’ll go from there.

Okay. Absolutely. Alright, so couple got two more  slides here. Very quickly, ’cause we’re not gonna  

analyze this to [00:10:00] the nuance, but the  idea here is that this is the EPS guidance. These  

numbers are sick. Yeah. And if you look over  here by sector I mean if you add up all the  

other sectors, it still doesn’t equal how much  the technology stocks are responsible for EPS.

And EEPs growth and guidance. Yeah. It’s almost  like, why would somebody say, why would I invest  

in anything other than tech? I get it. There  are other things that are moving, but again,  

the top 10 stocks, it’s just gonna keep driving  the market one way or the other. Your thoughts?

Jeff Kikel: Yeah, I totally agree. And, once again  the earnings per share is one thing. The market’s  

a totally different one. And once again, I  think any sign of. Okay. They’re slowing,  

they’re not as high as what it was expected.  And I think they’re gonna get just actually  

absolutely pummeled and poleaxed at that point,  and, in a very short period of [00:11:00] time.

For me right now, I’m yes, I agree. You  gotta be there. I do that primarily through,  

qqs and SPY and stuff like that, which are the  ETFs for the market. But as far as individual  

stocks and things like that, I’m really staying  away from ’em because man, I it, you can wipe  

out 20 or 30% in a day if something doesn’t meet,  what the inflated expectations of the market are.

Ron Lang: I agree. And then the last slide here is  just specifically the tech sector. This is insane.  

This is just looking at the amount. They’re  just, they don’t know what to do with their  

money. Yeah. That’s why there’s, there should  be more m and a done, but obviously they’re  

just gonna gobble up the small and mid cap for  either, filling the holes that they’re not doing.

Like a lot of the small AI companies that maybe  have. One good idea, right? That they don’t have.  

You know what? Petty cash, here’s a few pennies  for your company. Yeah. That’s what it comes down  

[00:12:00] to. Look at Netflix and them trying to  borrow Warner Brothers. Yeah. Now they upped it.

So they’re gonna give more cash  possibly than stock to make it  

look more attractive. It’s all funny money.

Jeff Kikel: Yeah. And I think it was interesting  I forget somebody was telling me about,  

google Acquire or net meta acquired Somebody  just recently another, like a big player  

and. I mean they paid like $2 billion for  the company, but I’m like, you know what?

Don’t bet against meta. Their  acquisitions have been really outstanding.

Ron Lang: But the interesting thing is  I know a lot of people use Instagram. I  

don’t know a ton of people that are still  avid daily, multi-week Facebook users.

Jeff Kikel: It’s, it depends on the crowd.  The Facebook crowd has become older.

At this point. Instagram’s still that younger  mid range. I, Instagram. I post things to it.  

I just am not on it a lot because I  just don’t get it. And for business,  

it’s just not a really good platform,  

quite [00:13:00] frankly. And X is another  one. I just don’t get it. Yes, I know people,

Ron Lang: I

Jeff Kikel: never

Ron Lang: got Twitter.

Jeff Kikel: Yeah I just don’t get  it. I don’t understand it. Yes,  

there’s a lot of information out there. I guess  I consume more of X from the use of grok, which,  

basically lives on the information  off of there. But, other than that,  

the I Facebook, if I’m on there,  LinkedIn mostly for me at that point.

Ron Lang: Yeah.

Jeff Kikel: What do you got? All right, let me let  me share my screen here and I’m gonna go back to,  

okay. Get out of the way. Sorry, I’m complaining  about something that’s popping up on my screen,  

so I can’t see where I’m going here.  All right. Interestingly enough,  

it was a very big economic news week for once.

We are starting to get, and you’ll see  as I go through this, some some of the.  

Missing data from previous months. Interestingly  enough, a lot of the departments have started to  

double and triple up on economic data, so we’re  getting [00:14:00] caught up. So by next month,

Ron Lang: see if you can make that bigger.

Jeff Kikel: Okay. Let me see here. Is that better?

Ron Lang: A little bit, yep.

Jeff Kikel: Okay. Alright. So first thing, CPI,  this came out on Tuesday. Market reacted a little  

funky, and like I said, I can make a case. That  we might not see, or at least for the next few  

months, I know there’s an anticipation that  we might see an interest rate cut next month.

Maybe we’ll see that I could actually  see the case for them holding off for a  

few more months. Because as you see the trend  of some of this economic data from this week,  

you could make the point that the Fed. Is gonna  say, Hey, we’re gonna sit here and look at it a  

little bit. CPI we came in month over month point  three, which was at consensus year over year.

Yeah, slightly higher, but within the  consensus range, which interestingly enough,  

you’re starting to see the economists  not [00:15:00] have these barn door  

consensuses anymore. They’re actually getting  pretty tight with the consensus, once again,  

right on track with where we’re at. We’re  not at the 2% that the Fed wants to be at.

So they could make the point that, hey,  we’re still there. We’re not getting  

in the direction we want to be. PPI,  which came out yesterday, once again,  

month over month, we were actually  a little bit lower month over month,  

and the consensus on the low end of the range,  but we were actually higher year over year.

PPI, that’s the front end side of this. So  we could see a little bit of a bump up in  

consumer price index because of this  jobless claims. Jobless claims came  

out just an hour ago. Came in way below  the consensus from the consensus two 12.  

We’re below the range at 1 98. So once  again, starting to move in that direction.

Four week average is down to 2 0 5 now. If you  look at continuing claims we are actually on a  

great [00:16:00] downtrend. We keep bouncing  up and down. There’s a little bit of hankness  

in some of this data because this is a lot  of that October, September data that is,  

I don’t think was really true. So this is  probably what I would consider the first.

Accurate number that we’ve had in  a few months down to 1.8 million,  

1.88 million at this point. Once again, moving  towards that full employment jobless claims down,  

overall down. Moving that way. The big thing  in the economy has been new home sales and,  

you start to look at new home sales, which have  been eh, not so much over the last few years,  

but this actually so this was the October report.

So there’s actually two new home sales  reports that hit this week for October  

and for November. So our October number  7 38 blew out the range. And once again,  

this is something that. Never seems to [00:17:00]  get out there, so this was September numbers.  

I didn’t really hear much about this week,  but that’s a actually a good trend to see.

And then if we look at the October number, which  was, should have been released in November,  

we’re still at 7 37. That was a little  bit closer to the range but still above  

the consensus at this point, and  right in line with the prior that  

we just saw. So last but not least, existing  home sales. This has really popped up a lot.

Consensus was 4.23. It came in at four, three, 5  million way above the range or above the range,  

and a 5% month over month, and 1.4% year over  year, which we’d been negative. I can make the  

point that if the Fed actually believes.  That they follow data. I could see them  

and I think the market reflected that this  week, that the Fed could say, you know what?

Things are all moving in the same direction.  [00:18:00] Maybe we’re just gonna take a  

wait and see how this all kind of falls  out over the next few months. Thoughts?

Ron Lang: Yeah. I gotta tell  you the existing home market in  

Arizona is pretty stagnant. And I’m  expecting a bump up in the spring.

Yeah. Unless the fixed rate  comes down into the fives,  

mid fives or lower, which I don’t see for a while.

Jeff Kikel: Yeah.

Ron Lang: This just may have been an aberration  

for a quick spike. Yeah. Because  I’m surprised to see that too.

Jeff Kikel: Yeah, but it’s two months  worth. Yeah. It’s two months worth.

And that was selling season wait.

Ron Lang: Oh wait. Oh, that was for October?

Jeff Kikel: Yeah, that was October. Ah, and for  September, October, September. It’s, and it’s  

always static around, so probably the November  number will go down. December number will go  

down from there. You won’t really see a spike  back up, but you wanna look at your turn, over,  

over what the consensus is and  what people thought things were.

You look at this September number, the  prior number was 7 37. [00:19:00] We’re  

at 7 38. And 7 37. So we’re at that  top end range of what the consensus is,  

which means I think we’re moving in the  right direction. It’s just one of those  

things that I think it’s by market. I  would agree with you to Austin, which,  

if you saw the home price decrease, there was  a list that the White House put out this week.

The largest home price decreases. In the entire  country was Austin, Texas at 7% decrease. So yeah,  

we saw a dramatic drop. And we’ve  seen a massive drop from like 2023,  

which was the peak. That’s when people were  paying stupid money during the pandemic for  

houses. We’ve seen a, like a 14% drop in  our home prices here in the Austin area.

Ron Lang: That’s not good.

Jeff Kikel: No. But it’s it’s getting  back in line with what reality is,

Ron Lang: yeah. But that’s not good.  If people had mortgages at that level,  

they could already either be at or getting  closer to being underwater. [00:20:00]

Jeff Kikel: I met with a, yeah,  I met with a couple that bought,  

what I would consider a starter home in 2023.

So they bought at the absolute peak, and they  are, if they were to sell their house today,  

they paid like 3 45, 3 50 for the house. If they  were to sell today, that house would be 2 91.

Ron Lang: Interesting.

Jeff Kikel: Which on that small of a  house, that’s a big drop at this point.

Ron Lang: Interesting. Okay.

Jeff Kikel: Yeah.

Ron Lang: I’d like to see I think the  real indicator, even though we’re,  

we’re behind on the numbers, is really  gonna be this spring season because Oh yeah.

You think about the confluence of factors between  changing the Fed trying to get the backend,  

the 20 to 30 year treasury down, the lower the the  the fixed rates and obviously just. The migration  

of people. There’s an exodus from California.  Yep. They’re coming here, they’re going to you.

It’ll be interesting. I think this  spring season Will, [00:21:00] will  

tell us a lot about the balance  of this year. No doubt about it.

Jeff Kikel: And it’s been interesting.  Once again I owning a co-working space,  

I get to understand just the flow of business  and things like that. And one of our neighbors,  

which is a pretty well known, they’re a pretty  well-known home builder across the country.  

And I won’t say who they are, but they actually  reached out to us ’cause they’re like, Hey,  

we need a few more spaces to put people ’cause  we can’t expand our space. ’cause the company  

is now requiring every single person in the  company to be in the office three days a week.

And I think that’s, I think that’s why like where  that couple bought a house here in our area. It  

was a hotbed of people during the pandemic moving  out of Austin. So selling their houses in Austin  

and moving out there because they were gonna get  to, work remotely for the rest of their lives.

And then all of a sudden these companies are  like, eh, get your butt back into the office. And,  

that’s about 20 minutes. [00:22:00] Farther  from Austin than like even I am at this point  

up in Liberty Hill area now you’re looking  at, okay, from Liberty Hill to let’s say.  

The North end or downtown Austin, you’re  looking at like a 45, 50 minute drive now.

So Wow. I think a lot of people are moving back,  moving back into town a little bit. And a lot of  

these people, you look at the federal government,  there were people that, didn’t go into the office  

for three or four years and now when they started  getting, okay, we need you back in the office.

And it’s hey, I moved to Western Virginia.

Ron Lang: That’s your

Jeff Kikel: fault. Too bad. You had to know Job

Ron Lang: was and you Crazy. And  we’ll wrap up is when during COVID,  

all the announcements were, this is temporary.

Jeff Kikel: Yep.

Ron Lang: Nobody said, Hey,  

we’ll see how it works out. Maybe we  can make a permit. No company did that.

Nope. I’m not aware of any. Nope. So  all these people that are like I like  

this lifestyle. No. We said it was temporary.  Yes. All the pushback. You know what TS baby,

Jeff Kikel: you knew better. Yeah.  Doesn’t matter. You [00:23:00] moved  

to ar. Yeah. You moved to Arkansas and your  job was in Dallas. Let me explain to you.

It’s gonna, yeah, it doesn’t work that way.

Ron Lang: No, I hear you.

Jeff Kikel: Good stuff. I think a lot. I think  we’re gonna have a lot to talk about this year,  

and we’re heading into earnings. I what  I consider the two most important weeks  

of earning season over the next two  weeks when some of the big players.

So we’re gonna have lots to talk about.  Folks, thank you for joining us. Please  

make sure that you share this with others.  Make sure that you subscribe to the channel  

if you haven’t already, and we will see  you guys back here the very next week.