Consumers now freed from strict coronavirus restrictions are journeying out and opening their wallets. As a result, the DOW was set to open higher this morning on the idea that retail sales are shattering already lofty expectations. It’s a positive start to the day, how do we hold it?
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Rob Black: Once again, sitting in for CFP Chad Burton is Rob Black. Chad and I go back 20 plus years. So it makes sense. He is more of a wealth manager. I am more of a wealth accumulator in generic terms, but it’s good to shake things up on occasion. Hopefully you’ll get a different point of view today. CFP Chad Burton will be back tomorrow with his originally scheduled programming.
Rob Black: May retail sales surge, 17.7%. That is quite the news to get in your car and go to work to. Are you getting into your car and going to work these days? 17.7%, 8% above forecast. That’s a stunning number. We knew that the second quarter numbers were going to be awful. We knew that the third quarter numbers were going to be some of the best ever. This got pulled into the second quarter, but we’ll talk about that as we go along. Total sales, excluding autos, both set records, total sales and sales excluding autos, excuse me.
Rob Black: I’m still jump starting my brain right now. Stock market jumped on the news this morning. Over a thousand points, the Dow is set to open higher on the idea that retail sales are shattering lofty expectations. Consumers freed from the confines of coronavirus are stretching their economic wallets as the lockdown started to loosen. Donald Trump was quick to notice. Wow, says his Twitter. May retail sales show biggest one month increase all time. Up 17.7% far better than projected. It looks like a big day for the stock market and jobs.
Rob Black: So Trump is jumping on anything he can jump on right now. And I don’t know, there’s a thought that his administration is trying to win the election by strengthening the economy. And the reason I say that is most of the policy coming out right now seems to be having a statement of, okay Democrats, you want to do your police reforms and we’re going to want to replace $600 unemployment benefit with a back to work bonus. There seems to be a lot of negotiating.
Rob Black: So it’s going to be a positive day or it’s going to start positive. And the question is, how do we hold it? Yesterday started super negative and then it went super positive. It was one of those days where I was like, huh, what do I say about that? Everything has been making so much sense recently on wall street. March was awful and went from a 10% correction to a bear market, 30 to 40% below its recent highs. Depending on what sector, some of them got decimated like airlines and they’ve roared back. Hotels roared back. And these companies, they held up in the downturn. They were the ones who led us out of the downturn, like the tech companies. So a lot going on.
Rob Black: Positive news, it’s going to be a big open. And the question is July. I know you’re saying, aren’t we still in June, why are you worried about July, Rob. Lighten up, dude. Well, yesterday we started seeing some of the data on some of the states are reopening and it doesn’t look good. It looks like we’re spiking in COVID cases on any state that was aggressively opening. So just work with that for a little bit. Work with that for a little bit.
Rob Black: Markets are rallying amid an infrastructure stimulus as well. Before I went to bed last night at 9:00 PM, I was reading up on the White House and some of the press releases coming out. And one of the things that they want very much so is a one more one last trillion dollars. And it’s something that I think Trump campaigned on four years ago was the idea of what’s improved the roads, the airports and the bridges. The nice thing about spending a trillion dollars for infrastructure work is you probably get about $400 billion of roads and airports and bridges.
Rob Black: I’m not thinking the money is efficient, but you do get people put back to work and you do get people who do construction. Those jobs get filled by people who go, I did backbreaking work today. I stood out and directed traffic around a bridge that we were building. I was that guy who turned the stop sign. He’s probably making $25 an hour times 40 hours times. That’s going to be his paycheck and that’s money that’s going to get spent. And that’s money that gets taxed. So it’s kind of a win-win, except for you’re issuing in a trillion dollars. So it is it’s pot. I like the infrastructure spending. So I wouldn’t cringe if I saw that. That combination of us spending another trillion plus retail sales jumping, 17.7%. Are they really going to get people back to work when retail sales are jumping that much?
Rob Black: Are they really going to get another trillion on roads, if sales are jumping that much, it’s like almost like hurry up and do it, hurry up and do it before the economy gets better. But then we see the jump in COVID cases in June. I have a friend that went to Phoenix and I just want to go, fricking idiot. You know, it was upsetting. Like you just went through lockdown, you just went through all this. He’s going to a hotspot. He’s like, I don’t care. I’m going, is his mentality.
Rob Black: Anyhow. Anyway, I’m digressing. Hey, Electronic Arts has said the new Star Wars game is coming. It stock had a new, nearly two year high. So during COVID one of the things during the lockdown that I’ve done is I’ve watched way too much TV. And one of the things I’ve tried to roll back on, I watched the last Star Wars, because it came out on Disney Plus blah, blah, blah. I was a little stoked to watch it a second time. I saw it in the movie theaters once. I’m not one of those guys is going to pay 10 times to see one movie, not going to happen. I watched it on Disney Plus I was like, yeah, yeah, get it inside. And here, Electronic Arts, this morning, say that yeah, we got a new game coming.
Rob Black: It doesn’t surprise me that a Star Wars Return of the Jedi combat game where you get to fly X Wings and shoot up TIE fighters or fly TIE fighters and shoot up X Wings. That sounds fun to me. That sounds like a nice little break with the kids, but that’s not why Electronic Arts is hitting them all the time. Electric Arts stinks. It’s got some bad parts of their business, but they also have some things that are really, really consistent.
Rob Black: So they got the rights to Star Wars franchise, but you know, who makes money on that, it’s Disney. So Electronic Art says, we’d like to make video games and we make some of the best video games in the world. And Disney’s like, we’d love to have you, but just you got a license it and you have to pay us. That’s not quite the reason Electronic Arts is hitting an all time high because they do that to also with NBA basketball, NFL, they have to license it. NBA and NFL gets money and the players get money for the images that look like them. And earlier, late last week, PlayStation showed off or Electronic Arts showed off one of the new PlayStation 5 games and it’s an NBA game and it’s got Zion Williams and the sweat looks like the best sweat you’ve ever seen. The Tomahawk Jam looks like the best Tomahawk Jam you’ve ever seen.
Rob Black: So what’s really moving Electronic Arts stock, in my opinion is expectations of the PlayStation 5. And when that comes out, Sony is not going to sit around and go, hey, look at this beautiful hardware. They’re going to have to say, look at some wonderful software that we have, some games that you can buy today. We want you to buy our hardware in year one because next year you’re going to want it for cheaper. You’ll probably walk faster parts. You’ll probably want it smaller. So EA as a business is telling me, I don’t really like you because you got the NFL and you’ve got the rights that you have to license. So I look at Activision and look at Take Two, who own their own intellectual property and not a lot of licensing going on.
Rob Black: So I would look at those names on the excitement of the last half of the year with the Xbox and PlayStation coming out, there are positive things to look for and I like that a stock market. I don’t like all the stimulus that we’re throwing out. I’m not against it, but that comes with the price versus technological innovation, like a new PlayStation. And I know what you’re saying, you’re into video games, aren’t ya? Not really. You can find me online at Newfocusfinancial.com or Robblackshow.com. I’m Rob Black sitting in for …
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Rob Black: Welcome, Rob Black and your money. I’m Rob Black talking all things financial sitting in for CFP Chad Burton, newfocusfinancial.com. Just throwing around the schedule a little bit and it’s nice to get a different sound, a different voice out there, hopefully for you. And hopefully you’ve seen a couple of different things in the stock market, 800-516-1220 to get your calls on the air. Chad will be back tomorrow, just kind of a mental break kind of day, I think, which we all need on occasion. So 800-516-1220 to your calls and the air.
Rob Black: We are seeing some stupid stuff on the stock market right now. And it pisses me off and it angers me. And I wish the stock market, wouldn’t it let this happen, companies like Hertz, shouldn’t be allowed to issue stock when they’ve said we’ve got a liquidity crisis, maybe they should be allowed to issue stock, but I don’t like it. They say we have a liquidity crisis. We’re going to run out of money. COVID has destroyed our business. I saw a couple of weeks ago, I guess Hertz has a lot of Trans Ams or muscle cars that they’re auctioning off. I’m like, no, thank you. I know what I’ve done to rental cars in my life. And if I ever got a rental car that was a muscle car, not good.
Rob Black: I think I remember one night taking a car out into the desert of Phoenix. I think I remember that, but don’t tell anyone, I might’ve been younger. So Hertz’s stock rallied and up 230%. anyone who’s buying the stock is going to lose money and Hertz issuing stock, they’ve said, hey, this stock may last just a couple of days until we say it’s worth nothing. Hertz’s stocks should end badly, but people are betting on it. People are speculating that somehow some way, some shape, some form, there’s a white knight that Hertz, remember that car company, that OJ Simpson presenting it in the 1980s, running through a crowded airport showing you the speed of which Hertz gets you out of the airport. And everyone in the airport was saying things like, go OJ, go, as he’s jumping over a luggage, look at like a running back from the NFL.
Rob Black: Yeah, Hertz can go away and I think one of the reasons we don’t want it to go away is we associated with OJ in the 1980s or there’s something like when I say Hertz, do you think big yellow sign, I do. When I say Hertz, do you think, oh, they got those golden spaces where you just go out and pick any car you want and drive away. There’s a lot of brand there, but that company should not be rallying because they said we’re going to go bankrupt, which when you’re bankrupt, the people that get the money first are people like the bond holders. The people who get the money last are people like the stock holders. Stocks reward deal as part owner of a company and you get the spoils of being an owner. Bonds aren’t really being an owner. You’re giving a company money and it’s kind of like an IOU where you say, okay, Hertz, you want to borrow a hundred million dollars? Well, I’m going to charge you 3% interest because you’re Hertz. Oh, what, COVID hurt your business? I’m going to charge you 5% interest.
Rob Black: So it’s not working for me. I don’t like people buying stocks and bankruptcy and it ends badly like 99 times out of a hundred. Maybe not that high, but pretty darn high. Again, it’s not my money, I’m not dumb enough to do it. Let other people find its little financial Darwinism, the old Darwinian wood chipper. If you want to be dumb enough to throw your money into something like Hertz, just go throw it in a barrel and let it on fire, I’m fine with that. It’s your money. I’ll look all that much more attractive to the world. I brush my teeth every day, three or four times, I got good teeth and I got more money than you. I’m going to win. It’s all about teeth and money, right? Oh, you got caps. There’s a good reason to go out and brush your teeth. Dental work is not cheap. And dental work is not terribly well covered in the insurance arena even when you have dental insurance.
Rob Black: Personal computers have been the destination of a company called Intel, nothing about Intel. So Intel makes microprocessors that go in personal computers. And when you look around at the recent rally on Wall Street, you go, okay, tech stocks, big tech has done their thing or have they? Are some of the old tech companies not putting in as much work as some of the newer tech, newer tech being like a Facebook. I would say that Apple is a kind of a combination of old tech and new tech. I would say Google is new tech. I would say things like Intel and Microsoft, Microsoft’s little old and new, but Intel. Cisco’s very much on the old tech. No, except for we’re getting a big upgrade with 5G and with 6G in modems. Okay. Okay.
Rob Black: It’s killing me. 6G in modems, 5G in phones. And the G stands for generation. So Intel has an opportunity to get into more things and this upgrade up to 5G, 6G, and even the Xbox and PlayStation, except for they didn’t get into them. It’s like, whoops. Nvidia and AMD have been kind of like the sexier, the newer semi-conductors because they’re the GPUs versus CPUS. But there is a case to make for Intel right now, if you want to get in to a stock that may have some upside that may not have as much downside is like an Alphabet’s Google or an Amazon or Microsoft or an Apple. For some reason, pre-COVID we were like, hey, we got two $2 trillion companies here, Amazon, Microsoft, Apple, three, I guess, right? And then during COVID they all dipped below a trillion dollar valuation, or maybe they do, maybe they don’t and post-COVID in like June, they all wake up and they’re like, we should be rocking and rolling it.
Rob Black: And instead of being a trillion dollar company in their sites, it’s like 1.5 trillion. So you do look around in that sector, in that area of semiconductors. There’s a great ETF. S-O-X-X, S-O-X-X, S-O-X-X. It’s almost sounds dirty. SOXX with two Xs. I know you’re saying, you’re out of something, Rob. Or there’s the Invesco QQQ trust. If you hit QQQ you’ll see a lot of tech companies and you’ll get holdings. And if you look at the I shares Philadelphia semiconductor index ticker symbol, S-O-X-X, you’ll see a lot of semiconductor equipment companies and a lot of semiconductor companies. You could do some research on finding some under-performers there and that will … the under-performers might limit your downside and they might give you some upside that the sector’s already started focusing everywhere. 800-516-1220 to get your calls on the air.
Rob Black: Last month we talked about on this very show, a new company called Nicola, and it’s kind of the Tesla of industrial trucks for lack of a better word at this point in time. And now it’s one of the heavily, most heavily shorted stocks on Wall Street. I own no Tesla, but at one point in time, Tesla was one of the most heavily shorted stocks on Wall Street. And the shorts offers super big upside when someone who’s already sold, the stock has to buy the stock. Usually we buy the stock. We wait, wait, wait, wait, wait. We sell the stock. Nicola, a fuel cell-powered long haul truck play, which is losing a lot of money, a lot of people already betting against it. Interesting, right? That can create massive upside or they might be right. You can find me at newfocusfinancial.com. That’s newfocusfinancial.com.
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Rob Black: Rob Black and your money. I’m Rob Black talking to all things financial, money, investing and more. A lot of times I talk about video games because they think they’re relatable. And it goes back to my childhood where I was told, if you play video games, they’ll rot your brain and you’ll be a loser or something like that. I want to talk a little bit about a Fortnite and something that I think is compelling of what’s happening during COVID. Two, three, four years ago, we talked a lot about augmented reality and virtual reality. And I was like, I don’t know, that whole virtual reality thing though. The idea of me and my producer, Mike sitting on a couch, watching the Super Bowl together, and he’s got a big headset on and I got a big headset on. I’m like, isn’t this cool, we’re on the 50 yard line. You see, we’re in front row and we just saw … Whoa. And I can’t get over the idea. I like a football game. I like a Super Bowl. I can’t get over the idea of, I don’t mind spending money on tech, I get that. But I like the chips and the guac and the Super Bowl like, wow. Do you remember when we had Super Bowl parties? life was good and then COVID came and it was a long winter.
Rob Black: The idea of wearing something on your head really kills virtual reality to me, because I’m like, “Oh wait, wait, Mike, let me go get your headset for you.” And then we have to look at each other wearing headsets on and then that gets awkward because I want to stare lovingly into his eyes and go, “Did you just enjoy this as much as I did?” Can’t look into his eyes if he’s got a virtual headset on, right? So I think there’s going to be some things that it works really well at and there’s going to be some things that not so much like we don’t mind playing video games with a headset on and we can be a little bit more immersive and we’re starting to see some good games come out on virtual reality, whether it’s for the headset that Steam is making or the headset, Oculus Rift, that Facebook is making.
Rob Black: It’s getting out there. I know 16 to 25 year olds that have them. It’s not mainstream in any way, shape or form, but I bring this all up because of what COVID is done. It’s put us in our home a lot more and video game sales are going up, not down. It’s like movies that shouldn’t make any money like Trolls 2 does really well because we’re locked down and we’re like, I kind of want to watch Trolls. And there’s like no way you wanted to watch Trolls. But anyway, you get the idea. We’re pulling forward some business in different ways. And one of them is video games of which Fortnite’s a player and they just reportedly closed a funding deal to buy the game studio about $17 billion. Now there’s $750 million in new funding. Epic, which has acquired a company called House Party last year received 1.25 billion from KKR and other investors in 2018. So they’ve got a couple of years now of raised money.
Rob Black: At some point in time, some of these new investors are going to say, “We want our money back. Let’s go public.” So during the time I want you to study before it comes public, do you want to own Epic? It’s dominant in what they do. They do a game called Battle Royale, Fortnite Battle Royale. And they’ve kind of become the standard in kids’ games at this point in time as far as very social. I was trying to explain to a family member like yeah, these video games today are more way more social. Like I went to an arcade with one or two friends and I looked cool, 30, 40 years ago. Now you’re getting online with a guy from Vancouver who’s your friend and someone in South America who is your friend, someone in Texas who you’d never be friends with, except for now you’re certainly friends with. It’s much more social and Fortnite just had a new season ending event and it went well. Now a season ending event is some kind of stupid, for lack of a better word, end game, so it looks like the characters are doing something. Kind of a end game, kind of like live action thing.
Rob Black: And these events, they’ve done a couple, Travis Scott, where he pulled in and Travis Scott, this is so funny. I’m so afraid of what I say now. I wanted to say rapper, but then instantly I went to Billie Eilish and she’s like, why are artists who are African American, why are they soul singers and I’m a pop singer. Don’t you do kind of the same music? And I’m like, Oh, can I call someone a rapper right now, I don’t know. I’m assuming I can, but they just did an end of season event and it was so crowded by people who wanted to see it. They had to tell people, “No, we’re not letting everyone in.” So they hit capacity.
Rob Black: So what I’m trying to get at right now is Travis Scott did a concert where he had 12 million in game players watch his concert. That’s legit, 12 million. That’s a real number. Yesterday, 12 million people plus about 9 million people on Twitch and YouTube watched basically someone come into the game and kind of blow up a map. Oh, there’s going to be a new map in two days, that’s kind of their end game events. How are they going to creatively destroy the world? Something like that, I don’t know. But 12 million people is a big number. You’re starting to get numbers that are stunning, in fact, on a regular basis. In America, we drew all over Super Bowl numbers. Tom Brady and the Tampa Bay Buccaneers win Super Bowl 52. 103 million Americans watched, 1 million more than last year. They love the chips. They loved the guac. They loved the commercials.
Rob Black: So what I’m telling you yesterday was it yesterday, Monday, 12 million people watched and they had to turn people away. That’s legit. When Travis Scott, if you have not watched this, you need to because a, I don’t know who the hell Travis Scott is. He just doesn’t hit my radar of pop music in my life. But when I watched it, I was like, this is a really cool experience. Couple of years ago, they did Marshmallow, same thing, 10 plus million people. And I was like, “Whoa, you’re kidding me. This has that kind of appeal.” People will make an appointment to see a concert on a Friday night? Yes. And what’s happening is Fortnite makers, Epic, are saying, “Let’s get more and more people. Let’s test how many we can get up to.” And every time they do an event, it’s a little bit more and a little bit more.
Rob Black: So I started by talking virtual reality and augmented reality. And what I’m telling you is that if we take a look at a Travis Scott concert, it looks like one of the coolest video screens you’ve ever seen at a concert. You know, like when you first went to concerts, musicians got on stage and they strummed a couple of guitars. They were ugly. They were not good looking people. I know your saying, Steven [inaudible 00:26:39], but Mick Fleetwood wasn’t. So there was some people that were just, they were on the ugly tree when they were born and they fell out of the ugly tree and they hit every branch on the way down. Like they’re not good looking, but we’re testing more and more concepts in music in the seventies and eighties and nineties. And we got into laser shows. And then we got into big video screens behind the artist. And you know where I’m going out with this.
Rob Black: The Travis Scott concert was stable for 12 million plus people. And it was a hell of an experience. At one point in time, it’s like, he’s doing an astronaut tour and he’s flying a rocket. And then he goes into the ocean of Fortnite and he comes out of the ocean. He grows to 200 feet tall and I’m like, “Whoa, am I stoned because this is trippy. And there are these hot dancers in the background. And there’s a lot of psychedelic … Go to YouTube, they had Travis Scott Fortnite. I think that might be the future of some music. Now, let me see where I’m throwing that. I lived through MTV where we went from Friday night videos, which stank, he could watch literally five videos in an hour and they talk it up at 11:30 because Carson wasn’t on Friday nights. He only did Monday through Thursday or something like that.
Rob Black: I don’t know exactly what the heck was happening, but MTV comes along and they kill Friday night because they do 24 hours, 24/7 365 videos. And then they stopped doing videos, but that’s a whole nother thing. I think the music industry is about to change a little bit like it did with MTV. And it’s the Travis Scott thing. There’s not a band out there. There’s a company that’s gotten on the bandwagon called Splash and they’re creating the tools of Travis Scott like experiences to give artists, like your favorite band may be AJR and they can’t go out and tour right now. And they’ve got some new music that they want to get out. Who is Seattle grunge … Pearl Jam had a new album about ready to drop. The Killers had a new album already to drop and COVID just destroyed it.
Rob Black: I guess there was going to be a big summer tours for both. So now on a Friday night, I’ve done horse racing in the afternoon. I’m looking for some live entertainment and there’s just nothing. What is CSI again? What is CBS going to do with their Friday with their programming? All they do is cop shows and vice shows and SWAT shows. CBS is screwed. The month of June is not been good to eventual cop dramas. Just my opinion. It’s going to be very difficult, right? Some of the modern storylines into their current stories, but I’m digressing. So there’s this company, Splash, that is trying to help artists put together concerts. And what’s cool about it is, it’s cool and uncool. You don’t have to pay for lighting. You don’t have to pay the venue. You don’t have to leave your home. They’re going to provide all the animation stuff. They’re going to provide … They should a tech demo of one of the artist’s videos. And she’s kind of a hot chick who plays a violin. And I know you’re saying, “I’m in.” Someone who plays an electric violin, has a ponytail and can dance with it. And he kind of created an avatar for her and she did a hell of a great demo.
Rob Black: So I am believing that one of the technologies that’s being pushed forward, it’s not augmented reality or maybe it is augmented reality. It’s not virtual reality. It’s, I guess more augmented. We’re not using watching animation right now. And the artists like an AJR who’s kind of mid tier or Pearl Jam, who is high tier or Bethany Gates, who’s like a low end country western singer songwriter type. They can all have concerts on Friday night.
Rob Black: You bought a big TV years ago. It’s now internet enabled. You bought a better soundbar years ago. You could have a concert in your home on Friday night. And I think a lot of that’s going to be pulled forward. And I think there’s a legit business model. Would I rather my kids have friends over on a Friday night and stay home than going out and drinking and driving? Hell yeah. I like it. There’s some positives coming out of COVID, look for them. They’re green shoots of opportunity. I’m Rob Black sitting in for CFP Chad Burton. Find me at newfocusfinancial.com.
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Rob Black: He sounds incredible. Like Dan Reynolds from Imagine Dragons. I can’t get over that. And like, I don’t even want to look at Wikipedia and figure out if it’s his brother and it’s just the same sound and it’s a copycat. There we go. We’ll see. The same thing with the music industry. I’m just throwing that out. Study business plans, as best as you can, if you can, in my opinion, and just ask yourself, what am I hearing? What am I seeing? What am I doing? I talk to my kids about money all the time, but I don’t do it the way I do it with you. I try to find financial decisions. If it’s Fortnite, do you want V bucks or no V bucks? Do you want to do homework or no homework? Always look for business plans, if you can, and if that makes any sense to you.
Rob Black: The Trump administration wants to replace $600 unemployment benefit with a back-to-work bonus. I’m not a politician. If you listen to the show at times, I think I’m a moderate Republican and a moderate Democrat. I think I’m both. And I can be like a two-faced character from Batman. Oh yeah. And turn my face the other way. Yeah. So you want back to work bonus? Yeah. Do you? No. I like what we’re seeing out of government right now because it’s telling us, I know you’re saying, “You like what you’re seeing out of government?” No, not quite, but they’re telling us the response is no longer trillions of dollars to save the economy. Now it’s a trillion dollars to ensure the economy and you could see it the way they’re saying things like we want to send people back to work and we’ll give them money for doing that.
Rob Black: I think we’re progressing out of COVID and I know that could sound incredibly naive. I don’t play a doctor. I don’t pretend to be a doctor. I’m not going to quote Joe Rogan vitamins. I’m not going to do anything like that. Am I going to try to say, hey everyone, you got to live your life and you’ve got to have a gun and get freedom. I’m not going to do any of that. That’s not my thing. My job is to get you to retirement one day at a time. One thing I don’t want you to do is to focus on the best, most hopeful news. Oh, there’s going to be a vaccine. I’m going to jump in the stock market. Oh, COVID’s it’s only going to kill people over 70. That may be good for the economy because blah, blah, blah, blah, blah, prop 13. And you know, da da da taxes and social security.
Rob Black: I don’t want you to find the stories that appeal to you. I want you to be honest with yourself. Bloomberg is reporting the Trump administration is preparing a $1 trillion infrastructure plan. If brought forward, the plan is apt to have difficulty getting approved by Congress because what they’re going to tell us is they have a mixed view of where the economy is. The Democrats want another coronavirus relief bill and the Republicans now are saying, let’s get people back to work and get some infrastructure spending in. Again, I’m a modern on both sides of the fence. I don’t have a lot of opinions when it comes to politics. There’s really good radio stations that do that. I’m not one of them. The BBC is reporting a study done by Oxford University that indicates an inexpensive drug called dexamethasone has been successful in cutting the death rate of seriously ill COVID patients. In particular, the trial said people who are at risk of death, people who are on the ventilators, people who are on their last legs, people who the, you better know what your last words are going to be because they may have just come out of your mouth. Those are the people that they’re saying it’s working by over a third on them. It’s working on a third of them, saving them.
Rob Black: Again. I’m not a doctor. That means nothing to me. I don’t even know what I just said. Now retail sales surging, 17.7%, that is a happy day’s are here again. The sky is blue. Now keep in mind that was very dark period of the world. That it was a very happy, uplifting song, but we’re also starting to hear there’s some seemingly breakthroughs in COVID, some uplifting economic news. What I started with this segment is don’t have the best view of everything and don’t have the worst view of everything. I want you to go out there and see, is the market overvalued. That’s a great question. Sure, it’s higher than it was in February. I’m going to call COVID February 29th. The day that doesn’t exist, leap year. Somewhere right around February 29th is when COVID hit America.
Rob Black: So we’re going to say pre-COVID, we’re going to say post-COVID a lot in the world economic news right now. We had valuations that were extended. We had a nine, 10 year bull market come to an end in March, post-COVID or during COVID, times of COVID. You get the idea. How optimistic are you? 78% of respondents to a recent Merrill Lynch Bank of America poll said the market’s over valued. We started pre-COVID high. We knew valuations were stretched. And then honestly, earnings went into a crapper. The man who invented the toilet, I believe his name was John Crapper. I don’t know if that’s true or false, but let’s just say it is. The markets went into his porcelain temple and earnings went to nothing and millions and billions of earnings went bye-bye.
Rob Black: Some to the tune of trillions of valuation went bye-bye, but it all roared back and all we’ve done is stimulate the economy. The Federal Reserve said we’re not going to raise interest rates until end of 2022. Holy schnikes, did you just say end of 2022? If I died today, I want to pass on one dying message. Buy stocks. Okay, ready? Here it is. Here’s my Rosebud moment. When the 10 year treasury is under three and a half percent, buy stocks. I just gave you a lesson you can pass onto your child.
Rob Black: Now consult an advisor before taking action on anything mentioned, not all rules are set to work forever and ever, but that’s a good one. When money is that cheap, people tend to borrow it. When money gets more expensive, people tend to go, you know, that’s not a really good idea. I don’t really like your idea. I had a friend that wanted to create a Christian hotel. That was just for Christians, no alcohol, Bible study, things along those lines because when you travel as a businessman, you tend to get into situations of, am I going to test my marriage or not? It’s a little bit different if it’s a Christian hotel and in a great economy, he’s going to get money for that. In a bad economy, people are going to say, “What are you, crazy?” So there’s choices.
Rob Black: And again, do you think the market’s overvalued or not? Are you overly optimistic or are you overly pessimistic? It doesn’t pay. I like moderation in moderation. A little bit of salt, not much. A little bit of pepper, not much. No, it’s not hit an all time high. Interesting times in COVID. Find me at newfocusfinancial.com and listen to CFP Chad Burton show tomorrow at its originally scheduled programming.