Jeff Kikel: Good morning, Cents of Things  audience. It’s Jeff and Ron here once again  

with another Cents of Things for  the week. Ron, how you doing, bud?

Ron Lang: Good morning. Doing  well. Never a dull moment,  

as we like to say. Plenty of  good information between CPI,  

other economic numbers this week. And,  never a shortage of bad business decisions.

Ron Lang: Other fun things  going on in the world too.

Jeff Kikel: Absolutely. So we’ll  cover all that stuff today. I think,  

it’s been an interesting week on the CPI  front. That certainly had some effect on  

the markets and everything else. We definitely  I think the reality for a lot of people is maybe  

Ron and Jeff aren’t so wrong that we might  not have some interest rate drops this year.

Jeff Kikel: So we’ll get into  that piece. I [00:01:00] know  

you’ve got some funny business decisions. Great

Ron Lang: market timers. We’d be at the  casino all the time. That would be true.  

Yeah. I just know what to expect coming  down the road. I think we all do I think  

a lot of people don’t want to accept  it because They keep looking at their  

accounts and the balance is going up and  they don’t want ever want it to go down

Jeff Kikel: Yeah,

Ron Lang: now they call it the wealth effect,  

which I always hated that expression  years ago But you know what?

Ron Lang: There’s a crap load  of truth behind it So it is

Jeff Kikel: I mean it certainly is you know,  and I mean I look at it from my perspective.  

I know what’s coming, but I also can’t just  shift into Neutral or put the brakes on right  

now because it keeps going we just have to be a  little bit more, you know on the button, I guess

Ron Lang: That’s why if you did trailing  stops, you’d maximize your profits.

Ron Lang: There you Go back a few shows and  watch the trailing stop show 100. We should  

probably go through it again All right.  So worst decisions in business history.  

We’re going to get away from bad products  And bad mug shots. And we’re going to talk  

about a [00:02:00] bad business decision. For  those of us of a certain age can go back 25  

years or so when AOL was just completely  overpriced and they took over what an 80,  

a hundred year old company and literally  ran it into the fricking ground.

Ron Lang: Now rather, ironically, I love this  story because there was a behind the scenes  

documentary on this between Steve Case who  started a OL and Gerald Levin, who was the CEO  

of Time Warner, and actually Gerald Levin just  passed away in the last month and a half. And  

very interesting guy because I interviewed him 20  years later after the merger and he said you know  

what this merger would have been Unbelievable  and would have really worked and they would  

have been a powerhouse media company If the debt  level to make this merger happen wasn’t so high  

Because they were servicing the debt and that  was pulling away from other [00:03:00] financial  

resources That when the dot com bust happened  You know, they still had all the debt.

Ron Lang: They put this thing  together, but if they didn’t,  

they only had half or even none of  the debt, this company would still  

be intact. And I thought it was just  very interesting how they analyzed it.

Jeff Kikel: Yeah. But I still  think it was a merger of really  

unlike companies and it just never  did work really well to begin with.

Jeff Kikel: I just don’t see it. I don’t think  that Time Warner had the innovation built  

into it to make changes. And, they’ve slowly  dragged themselves into the, the future now.

Ron Lang: If you also think about it 2000 plus or  

minus was like the back end of  the flow of the print business.

Jeff Kikel: Yeah.

Ron Lang: Time life was like the big two magazines  

for how many decades. And then  we came into the digital age.

Jeff Kikel: Yeah. So

Ron Lang: this is Warren Buffett always  [00:04:00] talks about the last percentage,  

the last few Drags of a cigar, right? It’s  still burning. You got that’s what time life  

was warner is still around obviously but  again, this could have been a powerhouse  

if they didn’t have a debt I thought  it was just interesting to bring it up

Jeff Kikel: It’s funny because I still see  clients today that have aol email addresses.

Jeff Kikel: I’m like, wow, you’ve had that for  a while because nobody’s going out. You can,  

but nobody’s going out there today going I need  to get an AOL email address. Everybody’s got  

Gmail or something like that. And it’s amazing to  me. I’m like, wow, you still have an AOL address.

Ron Lang: Still happens.

Ron Lang: All right. So I got one more Kodak  hesitating to go digital. You want to talk about  

a powerhouse company. Yep. For a hundred years, I  don’t even know 80 a hundred years And they just  

got crushed. They just got crushed because they  didn’t adapt and people still use film today,  

but my God it’s [00:05:00] literally  what down to single digit percentages.

Jeff Kikel: Yeah. And it’s really the  artsy kind of photographer types that  

still use film today. Most of the professional  photographers shoot everything digital and,  

because they want to go in and adjust it  and adapt it and everything else, and don’t  

want to spend three hours in a developing  room, trying to do some of the techniques

Ron Lang: with all the toxic chemicals.

Jeff Kikel: Yeah. With all the toxic  chemicals and everything else. And,  

the chance of the film going wrong and all  that. Yeah, I just, I, that and. I think at  

that same time, didn’t they get sued by  Polaroid because Polaroid claimed that they,  

because they had their version of a  Polaroid and I think Polaroid sued them.

Jeff Kikel: So they got hit by both  sides of the coin. At that point and  

it’s just they didn’t do digital  and when they tried to do digital  

I remember I owned a one of their  first digital cameras. It was awful

Ron Lang: But think about it. I didn’t  know this if you were seeing the article  

here There was a kodak engineer that  developed the first digital camera in 1975  

[00:06:00] Yeah, I mean i’m sure this was  like the size of a vending machine But I  

remember digital cameras starting to come  out in the mid to late 90s Obviously they  

didn’t become somewhat cost effective or  economical into the 2000s But here it is.

Ron Lang: They were 25 years  ahead of the curve Yeah,  

you know everything gets you know smaller  better and here it is. They had a product  

And didn’t really develop it because why  just like with gm and ford for decades Hey,  

don’t kill the golden goose. We film  is how we make our money Suppress this.

Ron Lang: Yeah, and you know what the  rest of the company got surprised.

Jeff Kikel: A perfect example you have  you know, you had In the mid sixties,  

early to mid sixties, you had, Porsche  came out with a rear engine car. So GM  

decided screw you. We’ll come out with the same  thing. We’ll come out with the American Porsche.

Jeff Kikel: And, multiple times during [00:07:00]  their existence tried to put a mid engine car in  

and they’d go and then they’d come back and not  do it and all that. Now the new Corvette, they  

finally relented. And, the new Corvette is the  first time it’s a mid engine. I didn’t know that,

Ron Lang: but it’s taken the last couple  of years are just an incredible design.

Ron Lang: It looks like a fricking Batmobile.

Jeff Kikel: Yeah. It’s, it looks and performs  like a European sports car, it’s taken them 60  

years to do that. It, Corvette’s always been a  rear engine. Not real great on the track because  

it’s too overpowered and doesn’t, handle as well  now it does handle and it’s done extremely well.

Jeff Kikel: It’s funny with some of these old  school companies, they just didn’t do it. And  

Kodak just barrel rolled, cause I think they  were still doing copiers and, when printers  

went to printing and copying and everything else,  and they’re still trying to create, copiers and.

Ron Lang: I think the hesitancy and I heard  this if you look at just business history  

that you know You get that upper executive c  level [00:08:00] suite and they’re like hey  

our compensation’s based on cash flow  stock price whatever and they’re like,  

wait a minute That this  could kill our compensation

Jeff Kikel: Yep,

Ron Lang: So they’ve suppressed these  things That’s why you get these other  

companies that develop it and go above them  because they’re too resistant to change and  

I think in their minds falsely created  They’re thinking well, wait a minute if  

we come out with something like this, then  people are going to think wait a minute.

Ron Lang: What’s wrong with the other  

product? And they make them go a competitor. It’s  illogical. And we’re seeing some of this today,  

just, in the internet and some of the other  things right now. Look at we still got so much  

more to cover, but, like with NVIDIA and AMD  and Intel, Intel was the number one company.

Ron Lang: Blue past them. They didn’t  just walk past them. They flew past

Jeff Kikel: them,

Ron Lang: Because Intel had their niche  and not that they ignored what NVIDIA was  

doing. And maybe they probably had stuff  in R and [00:09:00] D, but they said wait  

a minute. But if we do this, it’ll kill  this. All, just false creation anyway.

Jeff Kikel: And I think, the challenge  that a lot of these companies have,  

especially these. Big monster companies like  that, they reach a point where they become a  

cash machine and they start generating,  they’ve become a dividend machine at  

that point. And people are invested in  them because, Hey, I want dividends.

Jeff Kikel: I want you to return the capital.  And then we go into one of these development  

cycles where, okay, now AI is moving in the  right, AI is the thing and we need chips for  

AI and Intel’s looking at this and going, oh,  crap. We can’t. We just can’t take You know,  

half of our dividend and refocus it into  new, this new technology and everything else.

Jeff Kikel: We can’t do that anymore because we’re  backed into a corner. And I think it’s interesting  

to watch some of these big, massive, the  magnificent 7 companies. That I think rightfully  

so a lot of them are resistant to paying a  dividend even though they’re [00:10:00] generating  

a lot of cash Because they can see  themselves going down that road of man.

Jeff Kikel: Once you go down the dividend  route, you can’t go back there’s no pulling it  

back and you know saying okay we need this money  because there’s a major technological shift. No,

Ron Lang: I agree and don’t forget it  was icon and buffet that pushed apple  

to pay a dividend over 10 years  ago Yep, little things like that.

Ron Lang: Anyway in the next Podcast I caught  a I got a couple of other goodies So anyway,  

we teased it in the last podcast  About here. We are the beginning  

of april and we already got the banks and  the anilin market analyst increasing their  

2024 Price targets already. These  schmucks. It’s just insane here.

Ron Lang: It is wells fargo and I actually  heard The market strategist that bumped it  

up. I think that they were at 48 50. Don’t  hold me to that. They bumped up to 55 35  

And he said begrudgingly They did it and he  said it’s not because he is [00:11:00] a,  

a hard because momentum, which i reason  to raise the price Stanley and J.

Ron Lang: P. Margan bears for two  years and G held to their guns.

Jeff Kikel: Yeah. I don’t even remember where you  

and I said we were going to  be, but I’m not changing the

Ron Lang: top end of my  high bar of the high target.

Jeff Kikel: I think I’m beyond mine, but  I’m keeping mine where it is because I  

think it probably is going to pull back  here, at least going into the summer.

Ron Lang: When we do our mid year  podcast I have the slides saved.  

We’ll bring it back up. I think  my base case was around 5, 000, 5,  

100 by year end. I think it was something  like that, but it’ll be interesting. Okay. I

Jeff Kikel: know mine was up 9%,  

I think on the S& P for the year  and maybe 11 percent on the NASDAQ.

Ron Lang: So a couple of other good things here.  GDP versus actual estimates. You and [00:12:00] I  

made fun, right? Wrongfully the Atlanta fed  was always like had a crazy number compared  

to the consensus of the other fed groups, but  here it is. They’re already looking by Q4,  

2024 at around one and a half  percent growth, which maybe.

Ron Lang: Again, if there’s a major pullback or  a recession, we’re not going to hit that number.

Jeff Kikel: Yeah,

Ron Lang: and then we got You know the  job ads here, which I think is funny  

because if you take a look at it  We’re basically relatively flat.

Jeff Kikel: Yeah

Ron Lang: We’re not adding we’re not  really subtracting Although I will say  

i’ve been getting calls from some of my 401k  clients Oh yeah, I’m leaving the company in  

a couple of weeks and I will say the number  of those calls of people leaving the company.

Ron Lang: I don’t know whether it was voluntarily  or involuntarily has spiked in the last two weeks.

Jeff Kikel: It’s interesting a couple

Ron Lang: of different industries.

Jeff Kikel: Yeah. [00:13:00] I, I went in cause  I, once again I do not trust the government on  

numbers anymore because I think they just, They  hit you with a big number on the headline and  

then they back it off two months later But if you  look at this one, it’s incredibly interesting.

Jeff Kikel: There was a decrease in full  time employment Okay, but an increase in  

jobs in part time employment. So hours worked is  actually going down because people are working  

two jobs now to make up for one job that they  had before. And the other side of it was on  

the bottom end. A lot of these immigrants coming  into the country are taking a lot of those jobs  

that You know that are lower paying but they’re  you know, they’re at least working at that point  

so that was another major increase was that the  people coming into the country Are taking some of  

those jobs that americans are just looking at and  going i’m not going to work for that cheap Okay.

Jeff Kikel: [00:14:00] Somebody will

Ron Lang: Don’t forget the one last thing we’ll  go to the next slide We brought it up last week  

or brought it up last week or the week before that  a lot of the new jobs You Our government jobs not  

private sector jobs, which means our taxpayer  money is just Inflating the unemployment number.

Ron Lang: All right, let’s move on.

Jeff Kikel: Exactly, right?

Ron Lang: So I thought it was interesting You  know here it is they keep raising minimum wages,  

which I got a slide on that in a second  But meanwhile, look at the wage growth.  

It’s going down. So here it is  inflation is going up wage growth  

is going down So we’re not getting  ahead Nobody’s getting ahead here.

Jeff Kikel: Yeah, I mean they’re going at  completely opposite directions and yeah,

Ron Lang: and we talked about this I think last  year that they start raising the minimum wage.  

We’re going to pay 15 20 for a big bet Here  we go. California is crap out of luck I’m  

telling you’re going to have more businesses  [00:15:00] Shuttering you’re going to have  

more people moving their businesses and it’s  not because That they don’t want to pay their  

employees But if you pay if you increase  the wages you got to increase your prices.

Ron Lang: Yeah. That means you  may decrease your customers,  

which is less revenue less profits to pay Your  people which means shut the freaking doors.

Jeff Kikel: Yeah. That one on the left the  foster’s freeze I actually heard the interview  

because on fox business they interviewed the  They didn’t interview the owner of the company,  

but they interviewed like the shift  manager or assistant manager or whatever,  

and she’s he held out as long as he could,  and he waited until after Easter weekend,  

and so they informed him on the Monday  after Easter weekend that he was shuttering  

the doors to the place, and it’s funny  because okay, yes, he is a franchise.

Jeff Kikel: But he’s still a small  business. So just because, yeah,  

just because it’s a major franchise across  the country, these are small business owners.  

And what they’re [00:16:00] saying is but it  only affects those big, okay. It affects every  

restaurant because if I’m paying, if Foster’s,  or McDonald’s is having to pay people 20 an hour.

Jeff Kikel: If I’m some small little restaurant,  I have to pay people 20 an hour or two to get  

them to come work for me. I can’t pay them  15 and expect them to work for me at that

Ron Lang: Here’s something interesting  you rarely and I’ve seen only a couple  

in all the decades You rarely see  a mcdonald’s ever shutting down.

Ron Lang: Why they’re well run  Yeah, they got incredible training  

from somebody from the cashier to the  management and they’re systematized

Jeff Kikel: Yep

Ron Lang: with this It should be interesting  to see How these franchise owners and corporate  

Handle that because they could only do  one thing increase the cost of of their  

meals of their food That’s the only  thing that they can do which means  

How is that [00:17:00] going to affect  the amount of people that come to them?

Ron Lang: It’ll be interesting.  Yeah, mcdonald survives

Jeff Kikel: Yeah, it’ll be interesting to  see because mcdonald’s owns most of the real  

estate That those things are in so they can  control at least the real estate side of the  

equation and not have that, the rents going up or  anything like that. But, you with wages going up.

Jeff Kikel: Federal minimum wage is. You know what  

seven dollars and eighty seven cents and  you’re paying people twenty dollars an hour

Ron Lang: I think federal I think they moved it  up to 15. Okay federal wage Yeah, each state can  

do it. But I think if you work for the federal  government, it’s a minimum of 15. I believe so

Jeff Kikel: Yeah, but even that, but that’s  if you’re working for the government,  

I think federal minimum wage,  the actual minimum wage number,  

I think, is still in the sevens  or maybe eight at this point

Ron Lang: but not, yeah, you’re  right, not for federal workers,  

just as the minimum guideline across the U.

Ron Lang: S., you’re correct,

Jeff Kikel: And it’s funny, they had some  kid on this morning that was whining,  

[00:18:00] complaining on On fox,  it was he was on a tick tock thing  

and he’s complaining that Somebody needs  to explain to me and like crayon eating  

mode Why I can’t afford to live in all  this because they’re paying you three  

times federal minimum wage idiots That’s why  because everything then affects it going up.

Jeff Kikel: Too many dollars chasing too few  

things. That’s why it’s going up.  Let me explain it to you that way.

Ron Lang: All right. I know you got a couple  of economic things we can cover to wrap up.

Jeff Kikel: Yep. Let me do that real  quick here and we will be done. Hang  

on. Let me get back to the top  here. Okay. So we have talked  

about economics and let’s take a look at  those economic numbers from this week.

Jeff Kikel: Yesterday it’s the New York  Post top thing, Bidenflation up another  

three and a half percent. Americans  are drowning in high prices. Now,  

the president yesterday Was [00:19:00] out and  about talking about, Oh we’ve been able to bring,  

we inherited a terrible thing and  we’ve been able to bring it down.

Jeff Kikel: Yeah. Okay. So here’s where  you came in Haas right about here. It went  

up. Yeah. It’s come down, but look at where  it’s residing now. And I don’t believe that

Ron Lang: number. We went through, I told you,  

I paid 46 for a breakfast three  months ago. I totally believe that.

Jeff Kikel: And we get into this in a second.  It’s interesting where the numbers are.

Jeff Kikel: And this was a really dramatic  report. If you get into the numbers,  

it’s a really dramatic report. You look  at it it came in at 3. 5%. Food was up.  

Energy was up. All all items, less food  and energy were up wildly more But if  

you dig into some of the numbers,  where are we at? Electricity up 5%.

Jeff Kikel: So I’m just not going down. Yep. I  just, I’m laughing because I have solar on my  

roof now and my electric [00:20:00] bill  has been 30 a month. I’m now that said,  

I’m still paying for my solar panels  for, but I basically put in a put at a  

certain dollar amount per month food away  from home. This right to your point up 4.

Jeff Kikel: 2%. Now, if you looked at this  from the previous month, it was a 0. 2%,  

so it jacked up 4. 2 percent year  over year this month. Motor vehicle  

insurance up 22%. And a lot of this is  transportation related transportation  

services up 10. 7. That includes everything  from Uber to trucking built into all this stuff.

Jeff Kikel: Motor vehicle maintenance and repair  8. 2%. And I think the reason for that is people  

are holding on to cars a lot longer. They’re  not buying new cars as much. I have taught  

I was talking to my insurance agent the  other day and I was trying to figure out  

we were [00:21:00] talking through this why motor  vehicle insurance has gone up certainly things  

have gone up because of the cost, we’ve had you  know Events and things like that have caused it.

Jeff Kikel: But what he was explaining to  me too Is the massive amount of push to  

move people onto electric cars, right? They  are much more expensive to fix if something  

happens to them It can cause massive  effects and it’s two to three times  

if they get into an accident, two to  three times as expensive going to that.

Jeff Kikel: So if you expect your  insurance rates to go down anytime soon,  

and the federal government is pushing so hard  to push it up. Get more and more electric cars.  

You better expect your insurance to be much,  much higher going forward. So my argument is,  

Hey, I have all gas vehicles. My  insurance should be going down.

Ron Lang: Doesn’t matter. We all pay for each  other. That’s the crazy thing about insurance.

Jeff Kikel: [00:22:00] Yeah, exactly.  We got PPI numbers today. They were  

up as well. 2. 2%. Versus the briefing.  com estimate of 2. 3. So they were not  

the shocker that happened yesterday with the  3. 5%, because they were actually yesterday  

expecting for inflation to go down or be  less, and it actually came in much higher.

Jeff Kikel: The interesting part of it is,  

and it explains a lot of our conversation.  Goods prices actually are declining a little  

bit. They went down a little bit for this  month. What’s gone up is service prices.

Ron Lang: I see. I want to know the  detail. What goods are going down?

Jeff Kikel: Yeah. And this  one is, this is a hard one.

Jeff Kikel: You can pretty much analyze  the CPI. So I will put that together for  

our next show. Because it’s way more  complicated in the PPI side. Because  

there’s all this, like capital investment  and transportation costs and all this,  

there’s literally, I want to say 45  or 50 components [00:23:00] in there.

Jeff Kikel: And so it’s not as easy to  look at and go, oh it was this, and this,  

or this trend it’s, it’s a jumble of numbers. And  I just didn’t have the time to really dig in, but,  

I think the big telling part though is services  and what’s built into services. people making  

more money, from your original chart, they’re  still not making enough to cover the cost.

Jeff Kikel: Their wages are going down. And I  think keeping up with the price of good. Yeah.  

I think even more, their hours are going  down. Their hours worked are going down.  

They have more, there’s more part-time  jobs. Now then there is you know full  

time jobs or The growth is more in the  part time jobs than the full time jobs.

Ron Lang: So that’s all I had today All right,  that’s all that’s a lot. Hopefully everybody, is  

taking their medication or took a shot of tequila  before all that I want some more good stuff next

Jeff Kikel: week. That’s for sure  to sum everything up more than  

anything today No matter what you’re  digging your bunkers [00:24:00] Yeah,  

what the more you hear the what and  what you hear out of Wall Street.

Jeff Kikel: They’re all lying. We are not going to  

see an interest rate drop this year.  I just I’m saying it right now. You

Ron Lang: went down again after yesterday. Yeah,

Jeff Kikel: if we see one,

Ron Lang: I will be shocked at this  point. I think we may see one. I think  

that’ll be political, but maybe one,  but I’m still leaning towards none.

Ron Lang: And I’ve been  saying that since December.

Jeff Kikel: Yeah. And it was interesting. I was  listening yesterday and I’ll stop this before  

we go. But but yeah, there was a guy on that  was talking about commercial real estate and  

stuff like that. And he was like, for them  to fix the commercial real estate problem,  

they’re going to have to drop the rates 200 basis  points, which ain’t going to happen anytime soon.

Jeff Kikel: And he goes, and they  shouldn’t. At this point so that

Ron Lang: means something major  like something catastrophic would  

have had to have you don’t want  that to happen Not catastrophic

Jeff Kikel: but

Ron Lang: major.

Jeff Kikel: Yeah, so I don’t see it  happening Just if you think you’re  

going to see [00:25:00] interest rates lower  They’re not At this point not yet folks.

Jeff Kikel: All right. Thanks for joining us. Once  again we always are here for you guys Certainly