Big Tech Embraces Hydrogen and Nuclear Power for AI Data Centers
46:26 Share

On radio, on YouTube, streaming live on investtalk.com, and for our podcast subscribers, this is InvestTalk. Independent thinking, shared success. InvestTalk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States.

Here is KPP Financial Chief Executive Officer, Financial Advisor, Justin Klein.

Good afternoon, fellow investors, and welcome back to InvestTalk. This is our Tuesday, February 25th, 2025 edition of InvestTalk. Appreciate you all tuning in during these turbulent times. I'm sure you have been watching the markets and maybe you're feeling the pain a bit. And we're here to help. We're here to guide you, help you understand the risks and rewards in today's markets, and help you understand the risks and rewards in today's markets.

manage the risks and capitalize on the opportunities. And that's what it's about. Not just on the investment side, but anything money related. So you aren't blindsided by things that you don't know. You know, my favorite quote from my grandfather is you don't know what you don't know. And we are here to help

shed some light on the things that you don't know, fill in those gaps so that you can make better decisions with your money each and every week, month, year and beyond.

Now, I'm Justin Klein, and the main way we help you is by answering your finance and investment questions. So we encourage you to call right now, pick up the phone, whatever's on your mind, whatever you're thinking, I guarantee you dozens, if not hundreds, of other InvestTalk listeners are thinking the exact same thing. So you'll be helping them as well.

Now, in just a bit, we'll talk about today's market performance and run down our show topics for the full hour. But as usual, we'll tackle this caller question first.

Hi, Investop. I am calling to get your opinion on the stock Gilead. The symbol is G-I-L-D. I wanted to see what your thoughts are on the stock and what would be a good entry point or should I hold back on it? I'll be listening to the answer on your podcast. Thank you. All right. Looking at Gilead Sciences and they make their...

They had issues a long time ago, which was their hepatitis, I think it was C, hepatitis B, treatment was too good. It was scaring people. And...

They had a boondoggle hearing much people, but then, you know, suddenly everyone was scared and they had to kind of pivot and use that cash flow elsewhere. They've done that. Now, this is rallied dramatically from the low 60s all the way up to 111. It was in the low 60s just last summer. So you're talking in eight, nine months. It's had a massive rally. That's because earnings are expected to go from four dollars and sixty two cents last year to seven dollars and ninety three cents last

this year. So that is a dramatic move and something that has propelled the stock higher. Now, it's absolutely overbought in the short term. So, you know, this is more of a it's more of a trade, you know, momentum trade at this point. You know, the valuations are no longer cheap, but that depends on kind of the progression of their their pipeline. And so that's what you're betting on here. And that's what the market is betting on.

you know it's doing much better than a lot of the other pharma names so i don't mind it um because it has a good business uh fairly good good good balance sheet etc so i'm gonna give it a thumbs up but probably uh on a pullback i'd want to see it around 100 per share now it's at 111. that would be an area to pick up gilead thanks for the call

now we have a lot of ground to cover over the next 45 minutes or so and our main focus point is about how big tech is embracing nuclear power for ai data centers okay so we'll look at that story and then we have some others on the docket one is in regards to the recent economic news i want to dig in deeper and explain how the really the move on friday was the start of i think the markets

pricing in a higher likelihood that Trump's policy prescriptions and order of operation will not be good for the economy. And I've talked about this before. You know, he can do things that are detrimental. You can do things that are stimulative. So far, the ones that are detrimental are leading the charge. And that is what is playing out in markets. And you can see that in economic news as well. So we'll look at that. Also,

If you take money out of your 401k, your IRA, you can, there's pitfalls there. So we'll look at things that you can do to avoid that penalty if you are ever in need of that, of, I don't want to say rating, but capping those funds. Okay. And then lastly, if we have time, we'll look at the difference between investor sentiment and consumer sentiment and how that works.

feeds into the equity markets. We also have voice bank questions. One is on BNY Mellon International Equity ETF and then defense spending. And we'll also have questions that came in via the comments section over on our YouTube channel as well. And we're going into a short break right now, though. And on the other side, I'll take a look at today's market activity and provide more answers to your questions at 888-99-CHART.

Okay, got to get serious with my finances. I've been working a long time and I know there's still got to be more that I can do to build my wealth quicker. I don't want to have to work forever. If you are not maximizing your employer-sponsored retirement plan, KPP Financial can help. With our professional oversight, you can potentially enhance your investment performance by an average of 3% annually. Hmm.

At KPP Financial, we provide a comprehensive 401k management program designed to optimize your retirement savings. Our approach includes creating custom investment allocations tailored to your goals and risk tolerance. That can make a big difference in your favor. Maybe it's time to tune up my retirement plan. For more information on how you can take control of your retirement savings, visit

visit our website, kppfinancial.com. KPP Financial. Sounds good. Let's face it, InvestTalk listeners. Life can be unpredictable, but securing your family's financial future doesn't have to be. That's where Fabric by Gerber Life comes in.

Fabric was designed for busy parents like you. And it's more than life insurance. Free digital wills, access to investment accounts to invest for your kid's future, and more. And you can manage it all right from your phone. Fabric offers modern, flexible term life insurance designed to fit your lifestyle. Whether you're planning for the future or just want a little extra peace of mind, Fabric makes protecting what matters most simple and stress-free.

Fabric by Gerver Life is term life insurance you can get done right from your couch, all online and on your schedule. You could be covered in under 10 minutes with no health exam required. Even if you have life insurance through your employer, it may not offer enough protection for your family and it may not follow you if you leave your job.

Fabric has flexible, high-quality policies that fit your family and your budget, like a million dollars in coverage for less than a dollar a day. Fabric has partnered with Gerber Life, trusted by millions of families like yours for over 50 years. Join the thousands of parents who trust Fabric to help protect their family. Apply today in just minutes at meetfabric.com slash investtalk.

That's meetfabric.com slash investtalk. M-E-E-T fabric.com slash investtalk. Policies issued by Western Southern Life Assurance Company, not available in certain states. Price is subject to underwriting and health questions.

Your questions are free. The answers are unbiased. Justin Klein is here now, ready to take your calls live. InvestTalk, 888-99-CHART.

Now let's go take a look at the market today. It was a decidedly red day overall. You had Nvidia down 2.8% with earnings on deck tomorrow. You had Tesla down over 8%. J.P. Morgan was even down 1.5%. You know, the big banks, Bank of America, Wells Fargo, all down over 1%. Apple and Amazon were the ones that were just hanging in there. They were both roughly flat. Microsoft down 1.5%, Google down over 2%. And

really the bigger names, Netflix was down, Salesforce down, Oracle down. But then you dig into kind of consumer staples, Procter & Gamble, Coke, Philip Morris, Pepsi, all up on the day. And even on the healthcare side, you have Eli Lilly, Johnson & Johnson, Amgen, all those, most of those healthcare names certainly were riding high. But even Visa and MasterCard, those were positive as well.

You had the health care companies, you had health up about 2%. Those did well. Finance was a bit more mixed, like I said, but really was weighing on the markets were those those those mag seven names. Certainly the bloom looks to be coming off the rose in some way, shape or form. And this is really a follow through, I think, from the deep seek news. And then you pile on it with Microsoft over the weekend saying they're pulling back from or looking.

The report is they're pulling back from deploying as much capital into the data center space. And so I think that will that that's weighing on markets since you have the Nasdaq down one and a quarter percent. And it's very similar to yesterday. Nasdaq was down one and a quarter percent. I think yesterday was down one and a half. So pretty close to that.

SP yesterday was down about half percent. Same today. Yesterday, the Dow was roughly flat. It was actually up today about 160 points there, about 37 basis points. So you had the dollar that was down that continued its downside. And part of this could also be the yen carry trade. And, you know, this is the yen continues to be strong. And this is a.

This probably reminds you of what happened just a handful of months ago back in the summer and again, carry trade unwind then. So that certainly can feed into the selling pressure that you're seeing on Wall Street. And I think that is a compounding factor that we're seeing.

here uh what else did i see uh we had bitcoin uh that that's that's big too here bitcoin i said this for a while that bitcoin is kind of in this 90 to a little over 100 range and kind of bouncing back and forth and bitcoin is typically a a proxy for liquidity in the broader markets uh because it's just kind of this ancillary uh asset and nowadays and so

when it drops it's a signal that hey liquidity is is drying up to a degree and you need a bit more cautious and so now that bitcoin it's now at eighty eight thousand six hundred in that range and it's broken that that ninety thousand level probably heads down to low eighty thousand level and we'll see if it kind of cold there that'll be a good indicator of whether the markets will

hold in on this pullback or you'll get, you know, a more consistent downtrend. Go look at Bitcoin in 2022, for example, that was on a consistent downtrend really started in the fall of 2021. It was that leading indicator. And so I'll be watching that, uh, as well. Now, certainly the, I've said it before that the, the, uh,

Treasury General Account wind down because the debt ceiling could bring liquidity back in the market, kind of hold things in here in the short term. But certainly there is the market re-rating both

both the big tech names because of deep seek and a potential pullback in investment on that front. And still not a whole lot of clarity on the killer app that AI is really bringing to the table to drive substantial revenue that is justifying the investment. So I think this is the year that those names are going to have to really –

dial in and find that. And so if they don't, I think that's a continued pressure on the downside for those names. Gold did pull back for the first time in a while. That was down one and a half percent on the day you had WTI. That was down two and a half percent back below seventy dollars per barrel near the low end of its trading range. So

That was the market today. Certainly, volatility is picking up and I expect that to continue throughout this year. Now, I hope you've been telling your friends and family about our free podcast downloads, which you can find anytime at iTunes, Spotify, or Google Play. Be sure to head over to our YouTube channel and leave a comment over there with a question. And let's tackle one of those now.

wade mulville says what are your thoughts on s bit i understand that inverse funds pose a lot of risk and are often used more by day traders but i'm curious to know if they this could be used as a way to bet against bitcoin over a long period say three to six months if i believe bitcoin still has potential downside would i be advised to allocate about one to one and a half percent of my portfolios and fun like this if not what are some other ways to hedge against bitcoin's falling price

Well, this is, I believe, let me pull this up here. S-BIT, S-B-I-T. So as you would imagine, short Bitcoin. That's what it stands for. And this is, looks like the, it's just the inverse performance of Bitcoin. And it's obviously going up now because Bitcoin's breaking down. Would you want to hold it for, I'll use it more as you're right. It's for trading. And, you know, can you hold it for three, six months? Sure. It's not levered. It doesn't look like.

And so that's fine. It's just a matter of how much downside does Bitcoin have? You know, if you if you pull back, let me pull up a chart here of Bitcoin and go all the way back to if you're on YouTube, you'll see my chart here. I'm going to go back all time high. OK, so in 2021, it peaked out right around 68,000.

And that was in the fall of 2021. It bottomed in the fall of 2022. So it went down for about a year and it went all the way down to the low teens. So you're talking about an 80% drop. So could you see something similar with Bitcoin again? I see no reason why that's not possible. Could Bitcoin get down to 30,000 again? I think that's...

There's no reason that's out of the realm of possibility. It's certainly possible. I'm not calling for it, but it's certainly possible. So to me, it's more of I wouldn't buy this and just hold it, just say, okay, I'll hold it for three, six months. It'd be more of I'd be watching the technicals. Are there any signals that the new downtrend is starting to reverse once again? Then you probably want to get out of it. And that goes back to this is a trading mechanism. Bitcoin is very volatile.

and in both directions and so you need to be able to be nimble and get out because as soon as that

up that downtrend breaks you know this will probably rally 20 30 percent and you don't want to be caught on the wrong side of that so make sure you're using it as a trading vehicle you're watching it regularly you're not sitting in putting it in a drawer for three to six months and then looking at it again down the road this is an active market in the in crypto that you have to be engaged with on a really a daily basis it trades 24 hours a day right so um

I don't mind using this for that purpose, but understand what it is. It's a trade. It's speculation. It's not an investment, and you need to treat it as such. Now we're moving into a break. Still to come, my focus point, and more answers to your voice bank questions. And of course, you can call me right now, live, 4 to 5 Pacific Time, at 888-99-CHART.

Justin Klein is here and ready to tackle your questions. Curious if you think it'd be better for me to let it go and spend money elsewhere. Well, first off, never take one man's opinion as gospel, including my own. InvestTalk is ready 24-7. When you give a recommendation on your show for a buy-in, like an entry point to buy a stock, if I already own it, should I go ahead and be looking to sell it? Don't forget to call InvestTalk.com.

Let me touch on a topic that most listeners need to understand. I want to talk about creating a trust and a will. Until recently, this has been a very slow and time-consuming process. Things have changed now because trust and will makes creating your will easy. And before I go further, let me pass along the news that you can get 10% off at trustandwill.com slash invest.

Listen, I know from personal experience that the peace of mind that comes from having one's wishes and assets secure is a good feeling. And once you get your trust and will squared away, you can focus on the other important tasks in your life, whether they are for business or fun. When you work with trust and will, each will or trust is state-specific, legally valid, and customized to your needs. Their simple step-by-step process guides you from start to finish, one question at a time.

You'll be able to keep your family prepared and protected by managing your will or trust online. Uncomplicate the process with trust and will. Protect what matters most in minutes at trustandwill.com slash invest and get 10% off plus free shipping. That's 10% off and free shipping at trustandwill.com slash invest.

2025 rolls on and you've got finance and investment questions for Justin Klein and Luke Guerrero. Call InvestTalk 888-99-CHART. Now, my main focus point today is about how big tech continues to embrace hydrogen as well as nuclear power for their AI data centers. It's a new study by IDTech.com.

And we know for years you have Amazon, Meta, Google, Amazon, Meta, Microsoft and Google all investing in solar, wind, carbon free energy sources. The problem with that in the world of AI and data centers is that's intermittent. And so their only other option right now, main option is actually natural gas fired plants because you can run those 24-7.

And, opportunistically, they continue to, like, through my island, try to restart those type of plants and put their data centers near those sources of energy. Why? Because it's easy to move data around the world. You can put that anywhere, connect it to the internet, right, and move that data. But, you know, it's a lot harder to move molecules around Earth, right? Think of shipping containers, LNG, et cetera. So,

That's why they're pivoting right now to that. But long term, it's clear they need to and they are pivoting towards things like small modular reactors. So they don't have to have a big nuclear reactor, but small modular reactor where they can produce those at scale on an assembly line and then put those into service kind of anywhere. Now, obviously, there needs to be regulatory changes to make those more feasible.

And there needs to be support from government and in order to bring down the overall cost, because that's what's similar about nuclear reactors as well as even fuel cells or lithium ion batteries, full grid scale lithium ion batteries, is that there's a lot of upscale up front, excuse me, costs.

But the long term upkeep and costs are relatively low, unlike something that's burning fossil fuels like natural gas. Right. And so that's a shift that they that's why they continue to look for these type of sources, because, yes, you have to maybe replace the fuel in a nuclear reactor, a small, small modular reactor every once in a while. But the cost day to day is so much lower.

And so over the long term, just like nuclear, sorry, just like solar and wind, it can pay itself back over an extended period of time, especially for companies that have the capital, especially that have the capital like the big tech names. And so that's why they continue to invest in this area. And, you know, they're also looking at geothermal. That's really limited on where they can set those up, though.

And I think that's why that will be more limited. It's more about how do you deploy certain technologies in areas that make the most sense from a workforce standpoint, as well as the use cases for your customers. Now, I point this all out because there's been some negative sentiment recently around

AI data center demand. And I think that's certainly true in the short term. But in the long term, you still need carbon-free base load power. And that's why I think the nuclear space still remains very, very viable, very, very attractive of all the ancillary AI plays. I think that's the place that will benefit the most continuously.

because the demand for energy it might ebb and flow it might be lower than the current expectations but it's still going to grow and it's still going to be needed and i still like a lot of the the players in this space and i think you have to be looking for opportunities now this is the time you look for up that's what we're doing we're sharpening our pencil who are the names within the industrial space within the nuclear space that will long term continue to be winners

Because there are plenty of those. And there will be plenty of overhyped ones as well. So make sure you're paying attention to those that are well run, that have good assets, and you can succeed. And there will be tons of opportunities in the coming years for that.

Now let's pivot over to, what do we have, a voice mail question? Hey guys, thanks for the show. I was wondering if you could take a look at the ticker Sierra India India, that's S-I-I, Sprott. They run the ETFs for a lot of the metals and uranium and Bitcoin. And I was wondering if you could take a look at the company, let me know what you think. Thank you very much. Bye.

All right. Looking at SII. And this is, I believe it's a Canadian company, if I remember correctly. Yep. Out of Toronto, Canada. And gold, precious metals are very, they have a lot of funds that own uranium, gold.

flows into that space, then I think this is that they're going to earn more money. Their earnings this year is supposed to be $1.89, excuse me, for last year, full year, once they report earnings, $1.89, and then $1.93 this year. So I expect that actually to accelerate. Earnings last quarter up 88%, revenues up 35%. The chart is certainly consolidating in a bullish manner.

I would imagine it'd be doing better than it has, though, because so much money is flowing into Bitcoin, sorry, into gold and silver, and they have a lot of funds like that. So this is more of an ancillary gold and silver play. It depends on how much exposure you already have there. I rather own it directly than through Sprott or owning Sprott, but I don't mind it as a kind of ancillary play on precious metals.

Then we're heading to a break. I'm ready to take your calls right now at 888-99-CHART. InvestTalk, now with more than 60 million downloads. Justin Klein and Luke Guerrero are ready to answer your finance and investment questions 24-7, 888-99-CHART.

Now, in the next InvestTalk, we'll look into this topic, choosing between dollar cost averaging and value averaging. That's tomorrow. But for now, I'm Justin Klein. I'm ready to take your calls right now at 888-99-CHART. And to that end, let's go take a live call. John from Memphis asking an investing question. And he's listening on AM 1220 over the internet. Thank you for calling, John. How can I help you?

Hey, thanks, Justin, for taking my call. I've become enamored with a certain strategy, and I wanted your views on it. I just finished reading Phil Town's Rule 1 investing book, and he says,

that all these metrics I'm about to mention, ROIC, revenues, EPS, cash flow, and book value have had to grow at least 10% a year for 10 years. And that kind of fits my risk tolerance. And I'm just wondering what you think about that. So you're talking about targeting companies that are growing those by 10% per year?

Yes. Okay. Yeah, those are all good metrics. You know, I like that it's

being relatively conservative there there are certain ones that i i like more like return on invested capital right i want that to to be consistently in the double digits or higher um so that's a you know there's certain rankings in those metrics that uh i would prefer um but generally those are all good numbers to to continue to look at continue to want to um see improvements on um

Now, it's easier said than done. You know, it's a it's you check all of those boxes over, you know, extended period of time is is not easy.

And you also have to consider the timeframe you're looking at, because is it going through some type of a recession? You know, you might throw out bad, great companies because, you know, they were in the travel industry, for example, and COVID hit. Or, you know, they were in the banking industry and then the financial crisis hit, but, you know, they were thrown out with the bathwater. So it's a good starting place, just like anything. And it's what you're talking about is quantitative analysis.

just looking at the numbers. And that is one part of it. That is definitely a big part of it. But there's qualitative analysis as well. Leadership. Because what if the leaders during that time are now gone?

What if it's a whole new ballgame, new CEO, new leadership team, and they are going in a completely different direction? So you have to understand that. What about industry dynamics? What if they're changing dramatically? So you have to understand that. What about regulatory? With Trump in, obviously, regulations are likely to change. Some will benefit certain companies and others not so. And so you really have to...

look at this as a basis. It's a great basis for what you're looking for, but it's not the holy grail. It's not the end all be all. But I hope you have good luck with it. And if you have any questions in the future, we're always here to help. Thanks, Justin. No problem. Thanks for the call, John. Now let's keep things moving and catch a fresh question from the comments section over on our YouTube channel. Iraq Don says, curious what you think of

think of one that in the past you liked a lot home builder nvr has come down quite a bit off its highs it seems elevated to me are you still a fan and if so where are you buying this is one of those ones i love this one because it's trading at a very high price per share seven thousand three hundred and thirty five dollars per share now that's down from a high of nearly ten thousand just

in October. Okay. So nice solid pullback here down about 30% from its high. It's called 25. And you know, it's, it, the whole sector is, is down tariff worries, higher interest rates, an economy that is weakening to a degree. All of this is certainly weighing on the sector as a whole. And just because NVR is one of the better operators out there doesn't mean that

Doesn't change anything. Okay. It doesn't mean that it's not affected by the same things other home builders are. Okay. Now, if you look at NVR's profitability and their balance sheet, return on equity is 39%. Return on invested capital, 32%. And they have net cash on their balance sheet. Free cash flow of $1.3 billion on $18 billion enterprise value. It's about a 6% or 7% free cash flow yield. That's pretty good.

And they are buying back, let's see, as of December 11th, they were purchasing $750 million worth of common stock, and it's a $22 billion market cap. So they're going out there using that cash flow to repurchase shares, and that's a good use of capital because their return on capital is very high. So I like this. Are home builders getting to that buy point yet?

I think we're getting pretty close. This is now back down to the 100-day moving average. I don't actually mind this as an entry point. Now, could it go all the way down to roughly 6,000 from 7,300 right now? Yeah, I think there's a potential for that, especially if you go through a deeper economic slide and interest rates don't drop materially. I think you could see more downside. But overall, if you look at

profits this year supposed to be over 500 per share you know about mid-teens multiple for a very good company uh with good profitability and good balance sheet i think this is getting to a point where it is attractive that is n v r now let's touch a bit on the current economic environment and why the market is reacting this way now friday sp was down 1.7 and the last two days

It's been down about another percent and a half each day. So you're talking about a 5% slide in three days. And this is much bigger of a slide than we've seen in the recent past, even bigger than the deep seek drop. Remember when deep seek had that news? And this is not just about the deep seek news and the Microsoft news, but it's also on the economic front. On Friday, we had purchasing managers index that showed a

Services contracting for the first time in more than two years. Services. Remember, services are two-thirds, three-quarters of our economy, roughly 70% of our economy. Now, manufacturing picked up a little bit, but new orders did not. They were actually down. So that was more of a flash in the pan. There's no signal that manufacturing will continue to rebound.

And then housing starts and new home sales all down by a lot with rates staying higher, as well as more people worried about their jobs, about tariffs, and what this new administration brings. And then that's not just flashing the pan numbers, but it's what the Michigan Consumer Sentiment Survey said. And that was negative across the board and not just by poorer individuals.

It was across income brackets, across wealth levels, all ages. Sentiment was down widespread. And most of it has to do with the tariffs. Then you had inflation expectations. This is why you got the drop in mortgage rates or, sorry, treasury rates, was inflation expectation break-evens, those fell. So market expectations for inflation dipped down.

And once again, if you look at inflation expectations from manufacturers, they're actually seeing higher costs already for raw materials. And they overwhelmingly blamed tariffs. And this consumer sentiment drop was the largest drop on durable goods, 19%.

basically people saying, hey, I'm not going to go out and buy a big ticket item, car, a new washer and dryer, whatever, because tariffs are going to be too big. It's going to cost too much. Now, on the unemployment side, everything seems to be hanging in there. But if Doge's effects are what they say they are, which we know that he's kind of inflated what he's really been able to save. But if he goes full bore with laying off federal workers,

it could increase unemployment from where it is today by about 15%. So we're in the low fours. It easily get unemployment up into the 5% range pretty quickly. And in the labor market, it kind of feeds on itself. And that could trigger a recession. Remember, said this before many times. First thing you learn in macroeconomics is C plus I plus G plus X. It's how you calculate GDP. Consumer, investment, government, and then net exports.

So government that pulls back dramatically, that can easily create a recession. And so that's what the market is starting to price in. And we're in an environment of fiscal dominance, meaning while everyone talks about the Fed and certainly important to a degree, what's far more important in today's market has to do with what governments are doing. How much are they spending? How much are they cutting? Are they issuing long data securities, short data securities? Because it's such a big part of our financial system now, this debt. And so

i just want to give that update because it's very important to get that perspective of what's causing market volatility to rise right now it's not just the ai stuff it goes beyond that and it can feed on itself so that's what i've said i've suddenly become modestly bearish modestly not calling for a crash everyone think it's not an on and off switch okay

So many people are like, oh, buy or sell. You know, there's trimming, there's, you know, shuffling your positioning. Look at what's trending higher in markets today versus not, right? So getting in line with those trends is very important. And so don't hesitate to make moves and be cognizant that these risks are building in markets. Now let's play another InvestTalk caller question now.

Hello, this is Paulo from Gaithersburg, Maryland. I'm originally from Germany and I've been looking into some defense spending and it's going to grow with the new administration and

current geopolitics. So do you have any suggestions where to look at if you think that this is a space that's going to grow within the next two to 10 years, let's say? I love the show and bye-bye. Well, I assume what you're talking about is the fact that Europe is going to have to start spending more on defense. It's pretty clear that

based on our fiscal situation, based on who's in the White House, there could be a decline in at least traditional defense spending to support NATO and our allies. So I think it's one of the reasons why Lockheed Martin stock is down from 620 all the way to 450 right now, 440. And I think that will continue. Now, there are rules on the show, SEC. I can't give you recommendations. Can't.

now if you call in you know if you notice we don't talk we don't talk about a company unless somebody asks me about a company those that's the rule okay so i can't sit here and say hey go buy this company or look at this company what i can say is yeah i do think that there's there's going to be higher demand from europe and it's just a matter of who those companies are that are going to benefit they're going to be american based defense companies

Maybe potentially some, but obviously a lot less than if we are the ones that the United States are the ones that are purchasing those military, that military equipment. Right. So I would just look there. I like what you're thinking. I do agree with you, but I can't give you a specific recommendation.

Now real quick, let's fit in another listener question. MQ Callie says, looking to invest $1 million in a way that will generate income. My folks just inherited some property from their recently deceased parents. They aren't too keen on being landlords or working with property managers, so they're inclined to sell those properties and invest the money. What do you guys advice for someone looking to invest a million dollars in a way that will generate income for them and provide less of a hassle than managing property? My folks are both in their 60s. It's a great question. I get this all the time. People

People have properties. They don't want to be landlords anymore. Either they inherited it or they're just tired of it. And they, especially with today's elevated prices in real estate, in many instances, it makes a lot more sense to go sell that property, get the cash, sell it at a cap rate of 4%, especially here in California, the coasts kind of elevated price where prices are elevated.

you can go and reinvest that in say the bond market right corporate bonds yielding six and a half seven percent right now you get a much better yield and no headache right no landlords to worry about and so um you know that's generally what we would say now

not good hedges against inflation bonds aren't so you know you probably want to mix this is a question that I usually answer on a portfolio review so I would encourage you to go schedule one on investdoc.com we can talk about this more directly kind of risk tolerance levels what what kind of income do they need is it small amount of income is a large amount of income what other assets do they have what other risks are they taking Etc all this is all these are things that we walk through on a portfolio review so I would head over there

Now, this is InvestTalk. I'm Justin Klein. We have one goal here each and every weekday is to help you achieve your own version of financial freedom. And our work continues after this final break. So get your questions in right now at 888-99-CHART. Every investor is working to build a secure financial future. The more you learn about how the market works, the better your chances for success. InvestTalk 888-99-CHART.

Hey, so I'm looking to get some exposure to like foreign markets. I currently only own U.S. stocks. So I'm looking at an ETF that would give me some exposure to foreign markets. I'm looking right now at the BNY Mellon International ETF, ticker symbol BKIE. Seems to have a pretty low

net expense ratio. Its portfolio is relatively diversified, a little heavy in financials, but I'm fine with that because I don't have a lot of exposure to financials. The chart looks pretty good. It seems to be doing pretty well year to date. It's actually doing better than the S&P. I just want to see if this is a good stock to start getting exposure in foreign markets with. Thank you. All right. Looking at the ETF.

Not a stock, ETF. BKIE. This is the BNY Mellon International Equity ETF.

I love this. I love that calling about international exposure. Definitely starting to outperform our broader markets. And sentiment on foreign markets got really bad last year. And I definitely think it's time to up your exposure to those markets. The value is just there. And as you said, this ETF has much better balance in markets.

the sector allocation. Technology is only 10% of this fund as opposed to S&P, it's over 30. Okay. And you have very little energy or basic material exposure in the S&P versus this is six in basic materials and five in energy. Still not probably high enough, but you know, much better. And industrials at 17%, just broad base exposure to various sectors. And I really like that. And if you look at

profitability, it's pretty good of the average name within the space. But the free cash flow yield ex financials is 21%. That's really high. That's really good. Okay. So there's a lot of good companies overseas that are under invested in under appreciated. And this is a great way to gain exposure.

So I have no problem with it. That's BKIE. Now the price is also cheap. I want to mention that only four basis points in that expense ratio. So that's pretty good. Morningstar gives it five stars. And yeah, if you're looking for a broad base ETF to get foreign exposure, we're not doing much work, not high fees. This would be a good one for. Now, lastly, let's touch a bit on really what's working in this market. And it's four sectors.

telecom staples pharma and the what's the other one reits are starting to do better why because these are bond proxies and they're focused on cash flow what's not working tesla nvidia meta is the only one that's really up since the beginning of the year the rest are either flat or down and if you look at sentiment sentiment still remains relatively bullish if you're going by cities panic and euphoria index

So that's why I don't think the market is likely to bottom out in the next 1% or 2% this year. It's going to be a choppy market. We're also going to get big rallies. You're going to see that this year. You're going to see big rallies, 10%, 15% rallies in short periods of time. That's what happens when there's change, change in markets. You get big sell-offs and big rallies. And more often than not, the rallies are even more powerful than the sell-offs.

The sell-offs kind of roll from one day to the next, kind of like they have over the last three days. This is what it feels like in a bear market if you haven't been in one in two years, right? I haven't been bearish in pretty much two years. And when you look under the hood of the market, you have to call a spade a spade. You have to call balls and strikes. That's what we're here to do. You never want to be permable. You never want to be permabear. And sometimes you can be darn right neutral. That's okay too.

Understand that this is just like in life, there's shades of gray and this gray is slightly red. I'm Justin Klein. This is another InvestTalk program. We thank you for listening. We encourage you to tell your friends and family about our free podcast downloads, which you can find anytime at iTunes, Spotify, Google Play, and be sure to rate and review on iTunes as well. And it's official. We have now surpassed the 59 million download mark, all thanks to you. Independent thinking, showed success. This is InvestTalk. Good night.

InvestTalk is a trademark of KPP Financial. Because of the nature of the interactive dialogue inherent in the format of this program, it's important for the listener to understand that not all comments made will apply to them. Specifically, nothing said shall be taken to be investment advice, or shall statements on this program be considered an offer to buy or sell security.

Thank you.

Thank you for listening, and your comments and questions are welcome on our 24-hour listener line at 888-99-CHART.