and we came back to an election, and that  is over. And thank God my phone has stopped   getting 16 texts a day from people that  aren’t even in my state asking me for money.

So we’re happy. Ron and I have got  a lot of good stuff going on today.   He’s got a little bit of information on  downdrafts in the S&P 500 kind of since  

1980. He’s got another piece on the what you  typically see after a midterm election. I’ve   got a piece on the election and your money,  what we should be thinking about and expecting.

And then finally, I’ll go over some  economic numbers this week that I   think are actually pretty good,  and they’re very heartening for   the future here. So stay tuned. We’ll  be right back on in just one second.

[00:01:00]

Jeff Kikel:   Hey, everybody. Welcome to the show.  Ron, how are you? Welcome back.

Ron Lang: Good morning. I can actually say  this in Arizona, it’s chilly this morning.

Jeff Kikel: Yeah. It was actually- Ron Lang: Chilly yesterday too … it’s Jeff Kikel: not chilly, but it’s that  when you walk outside, it just has some   crispness to it feel. Yeah. And, I don’t mind  it … and not 1000% humidity, which is good.

Ron Lang: Yeah. I was in Boston last week. Wasn’t   cold. It was good fall weather.  It was nice to see the fall- Yep foliage, Jeff Kikel: Yeah, Ron Lang: perfect timing to go up there right now  … I unfortunately don’t experience much of that   here. Yeah. But no, it was it was nice.  I haven’t been to Boston in a long time.

Jeff Kikel: We yeah, we have fall  foliage here in Texas too. It’s,   it goes from green to brown,  and then it drops off. So that- Yeah … that’s our fall foliage.

Ron Lang: The be- the best part actually  was the last 10 minutes of the flight,   going to the airport and then seeing everything  on the ground and all the different color. ‘Cause,  

you know- Oh, yeah … be- staying  in the city you see some if there   are- [00:02:00] Yep … parks or whatever, but  when you’re flying over it was pretty nice.

Jeff Kikel: Yeah. When they make that  turn out of Boston Logan over the,   over towards the Berkshires and all that’s  the most beautiful sight. It’s what makes  

me happy and at some point in my life will  be there this time of the year every year, Ron Lang: definitely. All  right, let’s get started.

So we have to ask if you  want to- What, what’s going Jeff Kikel: on in history? Ron Lang: Yeah, so actually I did include some  items that were from last week too because  

we, Okay … we missed a week. So 1886, the  Statue of Liberty- Oh, cool … is dedicated,  

and if you’ve never seen a documentary about the  history of the Statue of Liberty, specifically  

why France gave it to us, how it came over, how  they put it together a- and how they did it,   over 140 years ago- with the technology  that they had is just absolutely amazing.

Jeff Kikel: And it’s… the, the other side  of it too is they… I really love the point   of it where it was like, “Yeah, we’re  gonna give you this thing, but we’re not   gonna pay [00:03:00] for the base of it, so you  gotta figure it out.” That’s… where to put it.

Ron Lang: But it is, if you haven’t seen,  PBS always has something good on it. Jeff Kikel: Yeah.

Ron Lang: It’s really cool. 1922, Howard Carter  discovered the Pharaoh Tutankhamun. Yep. And   for years after, there be, were so many  people that died of mysterious deaths. They   always talk about that. Yep. I was always  enamored with all that archeology stuff.

Jeff Kikel: The really cool part  is if you go and visit what,   the, the Downton Abbey, basically,  the, his home they actually have a  

whole bunch of kind of fake stuff in the  basement that’s all that type of stuff,

Ron Lang: yeah. 1926, Harry Houdini dies,   and Harry Houdini and his mother  were very close his whole life.

And he went around to all the soothsayers and, or  and the mediums trying to communicate with her,  

and he knew within the first couple  of minutes if they were fake,   and he spent thousands and thousands- Yep  … of dollars trying to find a medium that,   to make him talk to his mom. [00:04:00] And  this is how he knew that that they were fakes.

Do you know?

Jeff Kikel: I c- oh, I can’t think of it. And in  fact, I’ve just been watching a series on this Ron Lang: So this is how he knew that they  were all fakes. Because when the medium said,  

“Your mom is saying, ‘Harry,” “‘be well.  Live your life'”- Yeah … he knew that   was a fake- It wasn’t- … because his  name was Eric Weiss Yeah, he was…

His name was Eric Jeff Kikel: Weiss. Ron Lang: Yeah. And his mom only called him  Eric, never called him Harry. Yep. Anyway.

Jeff Kikel: Yep. No, the cool part-  Thank you … is Fox Nation has got a   series where they actually took, I think  it was one minute… There’s a, there’s  

only one minute and 45 seconds of his  voice ever in, that was ever recorded,   and they took that one minute and 45 seconds,  used AI to basically create a whole series on…

it’s really cool. It is- Oh, you’ll have Ron Lang: to send me that link …

Jeff Kikel: it is scary cool because it, he looks  so realistic, and he’s basically telling his, the,  

his life story in his own voice, which is  just super scary, but very cool. [00:05:00]

Ron Lang: 1929, 97 years ago, we had Black  Tuesday- Black Tuesday … on the market, and that   that didn’t kick it off, but  that certainly accelerated it.

Jeff Kikel: It was the start. 1947, Howard Hughes’  Spruce Goose flies. I think it flew a total of,   what, a couple miles? That was it. Yep.  And I actually wanted to look it up,  

but it’s on display in Oregon’s  Aerospace Museum. Yep. Why   Oregon? I don’t know, ’cause it flew out  of Long Beach- ‘Cause- … in California.

And Ron Lang: it- I’m not Jeff Kikel: really sure yeah, it was in a hangar. Yeah,  it was in a hangar in Long Beach,   and they just finally got tired. It  was falling apart, so the guy that  

owns Evergreen Aerospace- … which is a big  cargo company, bought the plane and moved it   to Oregon and basically built a museum around  it. It’s, it is the second best airplane museum.

I’m an airplane nut, so it’s the second  best airplane museum I’ve ever been to in   my life after- Yeah … the US Air  Force Museum in Dayton. But yeah,  

it’s cool. It you don’t realize how big that  plane [00:06:00] is until you walk into there,   and there are, like, World War II  bombers that fit under one wing.

Like a B-17, they’ve got under one wing of  the Spruce Goose. Yeah. It’s huge. Yeah.

Ron Lang: I think it was more of a pet  project than a utilization project, but- Oh Jeff Kikel: yeah, it was wildly  impractical. It would’ve never worked.

Ron Lang: No and if you ever want to go to  another good museum, go to the one down in Tucson.

They, first of all, they have  a boneyard there- Yeah … but   also they have an SR-71 inside.  Oh that, that’s every museum now   has got a freaking SR-71. They just  handed those things out like water.

I hear you. 1959, Montreal’s  Jacques Plante is the first   goaltender to wear a mask, and I did look this up-

that I wanted to know wait a minute, how long  did it take for everybody to wear a mask?  

And it wasn’t until 1974 the last goaltender  actually wore a mask, so for another 15 years,  

nobody actually believed that it  was a good idea. And remember,   those masks, all it did was just cover  the [00:07:00] face, not the neck- Yeah

not the head, not the ear, nothing. I, it  just… and they always thought- You had   to- … it was a cheapskate thing- You had to Jeff Kikel: have a lot Ron Lang: of- … if you didn’t wear one.

Jeff Kikel: Yeah, you had to have a lot of really  ugly no-teeth guys that were playing goaltender.

Ron Lang: No-teeth, these guys,  there’s a, I can’t remember which guy,   he literally has 400 stitch marks on his face. It’s nuts. How he didn’t knock  out an eye, I have no idea.

Jeff Kikel: Yeah.

Ron Lang: There’s, and actually even back then   they were hitting the puck  80, 80-plus miles an hour.

You- Jeff Kikel: Not a slap shot … when  you think of, yeah, when you think   about professional football players, for  a long time they didn’t wear face masks.

They were some ugly… you see those guys back Ron Lang: then- Or if they had a  face mask, it was just one bar.

Jeff Kikel: Yeah, one bar Which did  nothing. And that was it but that was   much later even. In the early days they were just- Ron Lang: Oh, they had the leather Jeff Kikel: helmets … helmets and that was it. Ron Lang: Yeah. Yeah.

That was it. 1960, Lady Chatter- La- Lady  Chatterley’s Lover obscenity trial ends.  

I can’t get into the whole thing. I was reading  part of this. It’s actually- … quite hysterical,   like- Yeah … how they thought  [00:08:00] that back then it was   just basically pornography. Yeah. And  today it’s considered pretty tame.

Jeff Kikel: Yeah. Which is scary, but yeah …

Ron Lang: 19- 1962, Khrushchev orders  withdrawal of missiles from Cuba,   ending the 13 days in crisis. 1964,  DC residents cast first presidential  

votes- … since 1800. This was very  interesting because New York for a period,  

and then Philadelphia, were the  temporary capitals until- Yep Washington decided on that plot of  land where DC was. And then it was  

essentially dedicated in 1800, and then they  basically said, “If you’re a resident there,   you don’t have any- You don’t get a vote  … voting rights.” Yeah. But think about  

it. For 164 years, if you lived in the DC  vicinity, you had no voting rights ever.

Jeff Kikel: Yeah. And then in 1964, for  whatever reason, they added the 23rd Amendment,   which gave them voting [00:09:00] rights. I-  … it’s… I- I never knew this. It was crazy.

I- that’s nuts, yeah. Yeah.

Ron Lang: 1998 John Glenn- Yep … returns to  space at the age of 77. My parents are 85 and  

can barely get off the couch. I don’t know how,  this, this happened. The… obviously, oh, he   stayed in pretty good shape, but that’s- Yeah  … it’s pretty amazing. All right. So this is  

a quick slide. Now we’re past the midterms and,  we’re gonna talk about midterm returns over the  

next year, … ’cause I, It’s been in my thesis  anyway that we were gonna struggle coming into   the election, and then from now until the  end of next year was gonna be pretty good.

We did stumble into the election. I thought  we’d be down more, but- … I think the one  

big issue is going to be h- housing.  Yeah. People aren’t gonna be moving.  

People aren’t gonna be buying. And I think this  the housing market is going to remain pretty flat  

to [00:10:00] negative for at least another-  year or two, especially- Yeah … if they’re   gonna keep raising rates. Because obviously the  Fed rate isn’t a direct correlation to mortgage   rates. It’s really the 20 and the 30 year, but  they’re not coming down anytime soon either.

Jeff Kikel: But it ha- it lives on the expectation  that, okay, if the Fed’s in a raising cycle, it…

This is set by the bond market, and they’re  looking at we’re not gonna let it compress,   so we’re gonna keep raising rates along  with it.” So I’d… I’m with you. I don’t  

really foresee it changing much for the  next… it’s been this way since mid 2023,  

and I just see it being if you follow that chart,  I would- Pretty much guarantee over the next year  

it’s gonna be right at about that level, and it’s  not gonna change, which is gonna continue to- Yeah affect the housing market. Nobody  wants- Yeah … to move if… nobody  

wants to go from a 3% mortgage to  a 7% mortgage to make that move.

Ron Lang: Nope. So I think combination of  this and whatever the new Congress may do   in the first year, [00:11:00] because  I think what Trump tried to do in his,  

his first year of a second term, and just  railroad everything through as best as   possible, I think the new Congress  is gonna try that in year one, too.

But we- Yeah … we shall see. But again,   that and a combination of this is gonna be  tough. So here are the S&P returns since 1980  

with the max declines. So if you just take  a look here, every year, for the most part,   other than an anomaly of about nine years  here there was always some level of decline.

You saw- … in the late ’90s, we never  had a… We were never in the red from  

the prior year. We were just straight  up. … And then obviously you see what   happened following the dot com. But if you just  take a look here we’ve been up three years of  

double-digit gains. We had a better than, what,  one-and-a-quarter percent move just yesterday.

Basically- … covering all the losses from  the day before, and we’ll have to see. We’re   down. We’re a mix. It’s a mixed market today.  Actually, we’re down almost one-and-a-half  

now. But [00:12:00] it- … it should be very  interesting to see not only how we finish the   year, how… but how the market digests the  election results, and then next year, too.

You know- Yeah … you gotta understand, folks,  the market’s up seven out of every 10 years,   but we do have declines in a year, which is just  a flush out before we get higher. Your thoughts?

Jeff Kikel: Oh, I agree. Yeah, and  I think, a- and I’ll cover it in my   piece coming up, it, it’s yeah. I don’t  care what people say, it’s going to be…

It’s gonna be a mess for the next two years, but  very little is gonna get done, and for investors,   that’s actually a good thing. It’s a big  reason why we saw the market go up yesterday.

Ron Lang: So we had a slide  on this a couple of weeks ago,   because I was always enamored with the  history of it- Yeah … that where are  

we typically before the midterm, and  then typically, where are we after?

So this is the amount of days. So it’s 126  days, so basically four-plus months before  

and- … four-plus months [00:13:00] after.  So this is essentially taking us to the end of   February of next year, that we could potentially  be up 14%. I- it seems a little lofty to me,  

but a lot of the other numbers we were looking at  12 months out was an average of 10% since 1950.

Yeah. But overall, the per- the percentages  is definitely weighted to the upside.

Jeff Kikel: Yeah, and I think,  we saw during the summertime,   o- overall, the market’s still up, what,  9%, maybe 10 now with yesterday’s run,  

but who knows where it’s gonna be today. I could  see that happening over the next few months.

I don’t necessarily know if it’s gonna be m- you  know, S&P wise, we had a little mini correction  

over the summer with the huge focus on, oh,  my God, we’re gonna go after data centers,   and nobody’s gonna do this and all that. Y-  the reality is that i- it makes me laugh.

The people all that were complaining about  data centers are spamming my phone nonstop  

with ads and texts and [00:14:00] everything else.  Where do you think that comes from? The magical,  

mythical, whatever. So yeah, you’re gonna  need data centers. Yes, we need to make   sure we have that, but I, I think we may see  a nice little run-up in those stocks again.

I think it was… it’s gonna be not just  necessarily across the board, but I think in   very different areas, I think we could see a real  good run-up going into let’s say, four months out.

Ron Lang: I agree.

Jeff Kikel: And really Ron Lang: next- All right, what do you got? Jeff Kikel: All right. Let me bring this up, y’all  You know, of course, I got a lot of questions  

right out of the gate, ’cause, I live in Texas,  and we had a big change here in Texas, and, Huge

wanted to kinda share, I think,  my thoughts on this. Once again,   I’m gonna … i’m not gonna get political.  I could care less from a politics standpoint  

when it comes to investing. I am here  to help my clients and point them in   the right direction always. So here’s what  I think, and, first off, stocks cheered.

Why did that [00:15:00] happen? The Wall  … we changed hands on both sides of the,   the Congress. We have a divided government now,  

and stocks cheered yesterday. We were up 1,500  points in the S- or on the, the Dow yesterday.  

And the real story is gridlock is  good. It … When nothing gets done,  

and I think the two sides are so far apart at this  point, absolutely nothing will get done, and you   still have a president that can veto everything,  so none of the crazy ideas are gonna get through.

None of the good stuff, unfortunately, is  gonna get through either, because they’re   gonna be so busy fighting with each other that  I think nothing will get done. And usually,  

if you look at history, trying to pick, oh if  the Democrats win, these stocks will do good,   or if the Republicans win, these stocks  will do good, almost never has that worked.

So my advice to everybody and my advice  that I’m doing in our own portfolios is  

don’t trade [00:16:00] on politics.  Stay diversified. Make sure you have   the diversified portfolio of good, solid  companies, and the rest will take care of   itself. Good companies will figure out  how to make money in any environment.

… I think one of the reasons that the big  companies did extraordinarily yesterday is,  

you might see regulation, come in or more  regulation or something like that come in   from Congress, and the big companies have  the money to get around it. They’ve got the  

money to hire the lawyers to get around it of  course, they rallied in that type of situation.

But once again, I don’t think much  is gonna get done anyhow. That said,   let’s let’s take a look now at The economy,  

’cause there’s a couple things I really wanted  to cover that I just happened to notice,   looking over the economics for the week here. And  I’ll blow this up a little bit so you can see it.

Going into the election, we had a couple things  this week. I think probably the, [00:17:00] the   most interesting on Monday, so let  me blow this up here just a bit.

Ron Lang: No, that’s good. We can see it. Jeff Kikel: Okay, good. All right, on Monday  we had PMI, and we had ISM Manufacturing Index,  

both above, PMI was down just a  little bit from where it was prior,   but ISM Manufacturing up, which is fantastic.

JOLTS, this I think… a couple things. Factory  orders up 1.8%. That was up dramatically from  

the prior of .3%. And JOLTS, which  is the job openings up 7.52 million,  

up from 7.19. So that’s really good  things. I think corresponding to that,  

yesterday we saw ADP. ADP was  up to 86,000 and, that was up.

It was basically equivalent to where it  was. They had expected it to be at 63,000,  

so that was a way big [00:18:00] beat. Today I  think the really interesting thing was initial  

claims, and I had heard, going into this, people  were thinking it was gonna be up around 200,000.  

Came in at 189,000. Continuing claims I think  are a little bit higher than where it was,   so I think some of this was those prior  layoffs that are still hanging in there,   but we’ve seen a little bit less  layoffs going into this month.

What’s left for the week? The big stuff  for this week, non-farm payrolls tomorrow,  

unemployment rate, aver- average hourly earnings.  Those are higher, or expectations are a little  

bit higher. But it’s interesting, the  people that are surveyed. So there,  

there’s the forecast from briefing.com, and then  there’s the consensus of their economists, and the   economists are actually coming in at 50,000 on  the payrolls, which- They’ve been right lately.

So even though the forecast may be higher, they’ve  been right, and it would not surprise [00:19:00]  

me if we see that number come in lower than  65,000 tomorrow. I- if it’s more, I think  

that’s fantastic. But the reality is I- they’ve  been pretty dang right up to this point. Right

Ron Lang: the unemployment’s always the big  number the first Friday following, you know- Yeah the month. But, Yeah … for… It’s funny,  still, they always considered anything  

above 5% or anything, yeah, anything  above 5% was full employment. Oh, I’m   sorry- Yeah … anything below fall- 5% was  full employ- Below 5%, yep … and we’ve   been under 5% for what? Five years? Six years?

Jeff Kikel: Forever. Yeah. Ron Lang: Yeah. So yeah,  there’s gonna be inflation.

Yeah … until there’s more unemployment and more  layoffs and whatever, there’s gonna continue to   be more inflation. And obviously we were  printing money as if there’s no tomorrow,  

so- … and I don’t see that stopping anytime  soon, because if they stop printing money   without scaling back on other things that  will immediately throw us into a recession.

Jeff Kikel: Yeah. Absolutely, and the  government’s been once [00:20:00] again,   spending money like drunken sailors. Eventually we  run out of the ability to do that, and and you’ve  

got to actually have some adults in the room. And  what I’ve seen out of our Congress, regardless of  

whether they’re red or blue, is they’re addicted  to spending money, and until that stops, and until  

we stop electing people that are addicted  to spending money, it’s never gonna change, Ron Lang: once people stop trading in  US dollar that may wake some people   up- Yeah … but it may be too late at that point.

Jeff Kikel: Yeah, ’cause it  goes way too far down the line, Ron Lang: yeah.

Jeff Kikel: And with interest rates as high as  they are, the dollar’s still gonna stay pretty   solid going forward here for a while,  and as long as we’re leading the pack,  

our dollar stays strong. So  until it doesn’t, and that,   we hopefully wise up before  that point. But, Yeah. We’ll Ron Lang: know next week …

Jeff Kikel: that said, we’ll have another  week of craziness before next week,   and we will see you guys back here the next time.

Make sure that you hit that  subscribe [00:21:00] button,   and be on there, because we will  be back every week talking about  

this. And hopefully we’ll see a 14% run  average before February of next year.