Jun 26, 2016|
"Smart investing, simplified"
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
I. From those plans stroll in the broadcast studios he would still play and strong environmental forum where your host. Kendra are very bamboo president Roh plans strong investment. Full portions NeuStar and Bruce Morton investing. Symbian phone. And I'm Ken carver is the anchor desk along with Paul Parsons is a planned strike financial forum welcome back to program home. Great to be here another great weekend and you know these weekends we only get a few of them as we discussed last week sorry I was well enjoy your Friday Saturday Sunday all three good days that doesn't happen Murray Ottawa does not earn a solo England so I like to do is spend at least a part of my weekend in this image dusty old studio yeah we want to watch that early show and that's why we're recording on Thursday the Swedish. You can even when I did but I had to give it away and the reason I did was I'm unfortunately I've scheduling conflict and I had to something this weekend and so. Tom we are recording the show on Thursday afternoon and as a result we don't know as of this moment on the results of the brags that vote. And having said that I would be surprised. I'm if they actually do vote to leave and the reason I would be a do that is based on financial instruments that we've been watching obviously very carefully. How over the last several weeks but probably the most telling of them on that there're there're several indicators that you can look at one is I talked about it the last couple weeks this idea of insurance it's not really insurance are actually securities that you can buy. Bit expire. After a period of time and you're essentially betting that a security will gain value or lose value during a herd of time in this particular case there are securities that you can buy that Tom ought will do batterer if Britain stays in the eurozone are brick and leaves the eurozone and and I was a basic and I'm out in the price of that insurance has actually calmed down I'm over the last couple days in fact the price. I dropped in how. Half between Wednesday and Thursday of this week the day of the of the referendum. And so it's it's not surprising to me that other indicators were also showing the same thing whether it was. In he could going to bet fair which is a betting site gambling site in you know in the UK you don't have put everything your love for the bad and good. Not only can you bet on the outcome of the tracks you can bet on the over under. And the outcome of our relax I mean these people -- different knots about but data but what's nice about it again as you can really get an idea of how people are voting with their money because believe it or not it's one thing to have an opinion I was talking to somebody this morning at a client meeting and he told me is when a Red Sox game this afternoon and I said well you know it the difference between. How was somebody answers a poll question vs how they answer or or or how they behave when it comes to gambling assessed. Went win now you talked to one of your friends and say hey how do you think the Red Sox are gonna go today and saw they're gonna win they got to win today Iran and how many city wanna bet on it and it gets really quiet Marine Corps and that tells you you know maybe they're not asking you likely to win as as their confidence might exude otherwise and so are you right I frankly have the same thoughts when it comes to polling. Vs how people actually vote with their money and whether it's how they gamble on and literally there are overrun Garcon on the upper exit but there are other things to you can see is the pound sterling getting stronger weaker than if the currency local currencies getting stronger work it's highly likely that that's an indicator that you know they're gonna stay on in that in the union on if corporate bond spreads. On stay relatively narrow in other words if if how much you paying interest for a relatively high a good read it to corporate bond if for British company vs what the Bank of England has for ten year treasury if that stays relatively low but saying that investors don't see a lot more risk for corporation than they do for the government and the corollary stroke they see if you see that going to it that's spread the difference getting bigger and bigger access oh I'm worried that that the court the company won't be as credit worthy which is another indicator in this particular case that they'd be leaving but it you know we will wasting his credit spreads are actually quite small and have remained small and so as a result another indicator that you know Britain wouldn't would not vote to leave the the European bolts. Board dimensions although we don't have the numbers Nelson's we recorded the show early. Now that the vote is non binding. Yeah that's what's really important to look at what the government is going to do regardless of Novo yeah IE in I mean obviously would be catastrophic for any government to go against the will of the people let this happen what happens this week and in Massachusetts with the sale exploit if we don't know what nobody does. Haven't said that while things are one of the talk about and that was the implications of the Braxton for a spot on investors and and nom we actually sent summing up tore clients as we usually don't anytime there's an event coming more in our to tell him how we prepared their portfolios for so for a we did that again but we actually used a very nice and I'm simple. On table to explain what the implications weren't and especially as it relates to remain. So in the remain case if you stay in the in the European Union if I Britain stays and European Union. Couple things would happen first of all this the pound sterling should strengthen market is so. You'd get more dollars per pound sterling is one way to look at it another thing we'd expect to see is their interest rates would go up why because people if they buy more of a bond that that they think is really safety bit up the price of the bond if the price goes up that means the yield is coming down the corollary stroke if OK it looks. Like yeah I'm Britain will stay in European Union that means less disruption to businesses less disruption to prophets. As a result probably the price of safe assets like bonds go down which needs yields go up all right and sure enough we've been seeing that but I would expect to seize a higher interest rates. Not only in the UK but across Europe don't forget. One of the major drivers of German bonds scoring bullet German ten year bonds it's going below zero lows the potential for Braxton and the corollary stroke if I as we believe will happen Britain to does vote not to leave then I would expect to see German bond yields on go back up and expect to see their prices come back down and so if you're bond investor. And Britain are votes to stay that's not a good day for you you actually lose money the value of your bond goes down the interest rates on new bonds goes up okay. And then the third thing is what happens to stocks. Overall I think it's pretty. Widely thought that stocks would go up and could be a pretty good stock rally and part of the reason for that Candace if you look at European stocks and what they've gone on since last may which was really the peak of the market for both the US and Europe rather it's a this is may of 2015 hysteria hungry idiots we know our stocks we've had to cool setbacks but we in each time we've had 210 or 11% corrections. One last August another one and a December through February rained all both of those we've almost completely recovered were within 1% of the all time high okay. That's not the case for Europe and certainly not the case for the UK where they are down fifteen to 20%. From where they were at that time and that's after they've recovered some earlier this week. In anticipation of Britain voting for a mean in the European Union has so what does it mean it means there's more upside four British stocks and four European stocks than probably. Any implications for US stocks of fuel almost stocks and Britain did in fact vote to stay within the the the European Union. Then it's likely you could see some sort of rebounding get at least some of that fifteen or 20% back over the next you know couple weeks to mart's Coca-Cola some. I go over to this side of the ocean and look at that the US starts numbers we saw this past week care share so stocks this week were up a little bit the US and get you know again. On the reality of what people thought was gonna happen with the British exit from European Union you know one thing that the market doesn't like is uncertainty right Britain one of the biggest economies in the world voting to leave the European Union introduces uncertainty and a market. If you're wondering by the way how does Britain being in or out of the European Union impact. Economics overall. Let me just give an example of my my own kids my own kids work for money center bank in York city they have huge operations are across the content as well including in the UK. And what they said to me was there would be massive change as a layoffs and move on India organization because. So much of what European Union is about is the free flow of labor. Turn and so if you have people that are British citizens or France or French citizens are working in Britain. And all of a sudden you know a lot of those agreements should no longer in place and those people also need work papers and they won't be able to get work papers and all that stuff seats seat quite a bit of turn over if nothing else and aren't and tumbled to as a result. And that isn't good you know if if people are turning over there are not working and they're not working that means not creating GDP growth. So that's why the uncertainty I think is fair and that's why and is the the uncertainty become became more certain that it became more obvious that Britain look like they're gonna stay in on the European Union that's why US stocks start to rebound this weekend and again more opt in 012%. Somewhere and that that tough ballpark but not all US stocks were point 2% on and tussle is probably the best example that we'll talk about that later on in the shock as you know. I love to talk about a dozen sneak. And when did you know last week we talked about how the US treasury bond has been down in Barnes and around the world have been down and I went out this week. Well you know guess what if if stocks were up what would you expect to happen to bond price just the other exactly and that's in fact what happened in fact the ten year US treasury was up about 175 and up from about 165. So at least we're going in the right direction that's again going towards risk on as a poster risk off at this point both in the stock market and the bond market. And what about some of the yields of the bonds around the room a week or Germany last week in Japan was terribly good enough yet they're both again there there that the good news by Germany's they're no longer negative territory but you're barely positive on a ten year and Jack in Japan bonds are tenure are opt out but they're still in negative territory so there there are Rahm prices. Word down a little bit there yields were up a little bit as a result and we're both the US dollar. US dollar was relatively flat if anything it lost a little value to the Euro. The ball when we come back restart the oil prices because that as we've talked about every week that's very important to what happens in the markets in fact the correlations incredible isn't it with the US stocks aren't just assume we'll talk about bad and then of course you've got some funds stories and stories investor should know about including. Apple and you of course like to squeeze in at least Tesla Tesla apple Amazon we got a call euros that's when we return is the plan's strong financial form. This is tall Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what need to take a look at your investments and retirement plan called my office of 808897275260. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member finger as I can see classroom investment management and billions of mismanagement grouping concluded that any Russian diplomats who threw six. Hi this is Bobby Nelson. People use different strategies to acquire enough money for retirement. Some try to do it themselves. Others buy insurance or investment products though sometimes will benefit the seller more than the buyer what makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to act in your best interest. And be paid the same amount no matter watcher invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment. That's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial group linked member tumor SIPC plans to investment management is not an affiliate of next financial grouping and is located at ninety to Washington street denim. Okay. But the but I'm strong broadcast studios and the epicenter of parenting issues. This is the plan's strong financial forum where all portions president of planned stronger investment management. And I'm Ken Burberry the anchor desk alongside Paul Parsons and we are covering some of the business stories of financial stories that. You as an investor need to know about her should really makes this program different from many the other programs you're fall. And one thing Paul would like to do and we re mention your phone number every week to do that coming out. Is you you can spend about an hour or so with somebody and look at their portfolio make recommendations is an obligation meeting point. We'll talk about your goals and find out what are you what what your portfolio was four what goals are trying to satisfy. And then we'll tell you whether or not we think are on track to do that as well as. If we think they're kinds of investments you and makes sense given the current economic environment. And what it lumping them we should mention too because you do have a fiduciary duty to personality and yes you're going to give recommend something different to me than you would to socialize father or my brother and for those who don't. What a fiduciary obligation is a you know and it's not just is whatever we recommend teams suitable for you it actually has to be in your best interest. So what that means is if there's a lower cost alternative say there's. On ETF or mutual fund that has a lower expense ratio and similar performance and similar holdings and similar background to another one we are obligated to use lower cost one of course we would anyway but. It's it just is comforting I think for people to know that that is in fact the way that we are regulated crimes so it's it's an important differentiator from. Many people on the radio over selling insurance products for example on and frankly what they are doing is. You know they're selling a product and getting paid a commission will take commissions we are fee based advisor which means. You pay us a percent of assets and we look after assets and what are we investing one has to be you were best interest. Balls toll free number 88 B 9727526. That ADB 972 planned or go online to plan strong dot com. Instead of that no obligation meeting. And I know there's somebody in your office most of the time these are a couple of summer weekend you know give them some time are exactly right but don't get back you on Monday and a NASCAR and in balls are does does he read back in time for the don't just throw this one thing in as well. Paul's at the table you sit down for every time. It's not one of the analysts you know I know some of our competitors talk about all you can meet one of our analysts and you always meet with me and one at the end so I mean every meeting with every one of our clients that's really important. Not that once again to over number 8889727526. OK it also wouldn't argue about oil prices and it's been really a big story especially this year I mean just when you look at what's have crude oil since December January. Well yeah I mean this was huge it's so funny because Tom. And back in December January February we saw the price of oil really dropped precipitously in the we're all kinds of calls for only god this is the beginning of the recession and time to get our older and and all of that and and in fact if you had got knocked that point you would have missed on 13% for turn. So you know for me I look at that and say well. Content there's a reason that we did a whole bunch of analysis to determine what we thought was gonna happen the price of oil and we actually. Put out a paper are two all of our clients back in the February timeframe we also made it available to listeners and and in that paper we talked about the reason that we thought the price of oil would not could infect could not accord in a beast on supplying and demand dynamics. In any way stay in the twenty to 25 dollar range for a sustained period of time and affect the price of oil malice were down it from 26 dollars are back in mid February to. Are just around 5051 dollars a barrel doubled. Why and frankly as you said begin as we left the last segment of the show cam on the correlation between the price of oil. And the stock market the US stock market is almost one for one I mean you can literally watch that the correlation of the price of oil and the price of our stock market go up or down in other words. And and we saw that actually dramatically and and it's that that correlation is still very very high even today mind and so the price of oil right now is so I just around 51 dollars a barrel for war for west Texas intermediate a little bit higher than that for a loop between 1551 for west Texas and Brent. On and so you know if people see him in another and that I get a lot of questions virus what do you think should happen with the oil going in the future. And I talked about that and our conference the future of everything and I said that I do expect the price of world a rebound the seventy to eighty dollar range sometime over the next couple years. On when he talked about the what's the timeframe for that within in a when we can hit 61 we're gonna it's 65 and so four and a lot harder to do mambo what I can say is if you look at supply curve and you look at where we are today and you look at. How much are part production is actually offline right now we're right now mind you can get a pretty good feel for the fact that we will Aussie prices increase over time overall. And like I said three years from now I would be very very surprised if the price of oil was on the 7580 dollar and. The fact that that some production was halted or slowed down and up prices grew very low that obviously has to affected the supply going forward I think those things don't start up on a dime to learn though they don't and and not only that even when they do restart it takes awhile for them to get the oil back out of the ground it's it's not something instantaneous and you know the number recounts were down like further recounts that we have a high market a couple years ago so critical wildly you don't jump start directing again. So anyway the reason that that's so important is because. Our oil our overall the price of oil overall in the demand for oil overall is really viewed as a proxy for the health of the worldwide economy. Think of it this way he can't fire power plants he can't drive cars without oil OK and so you know energy is kind of life blood of all industry and and if that's the case. Then that's a really good proxy for how you think of the market's overall will do and frankly how the economy's wheels dual world so that's why it's so important to us and frankly it's driven a lot of our returns. In a favorable way for 2016. You don't Paul didn't read very quiet week for government data but one bit of data Eric actually has to do with through the oil yeah I mean got the crude oil inventories came down a little bit again this this so weakened not huge but again are in oaks several weeks in a row we're seeing slight declines in the inventory levels but still very high for historical levels of what they're going in the right direction they're going down that's part of what we watch for. And then you know there were couple other men indicators that came out this week to initial jobless claims were very good and I 259000. That's really really low. A so very few people applied for first time unemployment benefits. And then existing home sales were very good at around five and a half million units and that's about a four and a half percent increase year over year so same time last year. And that's the best rates since 2007. So were getting for existing home sales canning you make you are talking monitoring the break he's you know you was an attorney to a lot of free fives and and new home for their presentations on closings Wright uses is picking up it's cool and we're married and had a reason for that is because rates are really low and also you know people have. My pull off a lot of these decisions for Ralph and they dipped further when they're finally saying okay it's time to pull the trigger a wanna buy that house or wanna trade up for whatever and so you know we're seeing a lot of that and as a result existing home sales were good. On and also we saw that new home sales were relatively good they came in at around 550000. It was down prop from the karma but it was still pretty strong right so overall pretty good place to be as far as housing is concerned and housing is an important part. Of our economic recovery. You know we want every house I generates two or three jobs when you think about him it's not just the construction guy it's also the guy that may guy or gal or robot that makes the appliances that going this early rumor every new house needs and new stole it needs new refrigerator news new cooktop. All the other stuff. And non you know every time you see how skip built it really has a nice spill over affect other aspects of our team in June comes all the way down to drew disarmingly exactly right as far as attorneys are concerned and closing dozens more ordered by the August. You got a really big story you weren't durable because this has to do with golf this has to do with the white effect I thought yeah I can't golf and I say this is so much in jest but I know those of you have been listening to show for a long time know that I'm all a bit assessed with the game of golf. I'm my wife would certainly tell you obsessed with the game of golf which is and by the way find the Turks it gets me away for a while Kerry pleased I don't want anyway. I'm so you've golf equipment manufacturer a cautionary. I came out and said they are gonna do IPO so they own. Both titlist and foot joy and for those of you play golf titlist golf balls are ubiquitous you know everybody uses them now on the torque. And then foot joy is probably if not view leading golf shoe I don't know they gotta be close to leading right right so. Anyway I'm not suggesting you get interest in this I did this surely SA a little bit of the last because. Their tech or is going to be guess what. GL well laughs well we're we're out so that's a good good bye that's right on the only Father's Day gifts going forward I'm sure it will but you but here's the bad news and I mean this truly escape from an investor perspective. You know of the game of golf has experienced a downturn in the US recently now and as a result I don't know how good bye this would and you know if you look at something like this. You know they're cut they're doing an IPO there doing an IPO for a reason which means they think the market is nice and warm for. Prize Marcus they like you or they like us golfers and they want us to participate a sudden it's because the markets right fort. I'm but I would wary of this because I think. You know certainly if you look younger generations are in older people are that have enjoyed golf and country clubs and may be dying off a bit. They're certainly some clubs that are struggling financially we've seen in all some overbuilding. And the question is will we see you know that that same kind of demographics and you'd like to see with golf. A because you know if you fewer golfers you have fewer golf balls and a break through her to be bought and golf shoes and everything also look at demographics before you decide. Hey this is something I'd consider investor. As someone who plays boom the sport so I'm thing you know revered tennis went through somebody argues where it was. Very very big around the country and then that one isn't so very very very that's right and I think golf is really struggling calm because of you know against stars you know would tie her. Kind of out of the picture of that at least in someone indefinitely. And you have some new stars coming into work citing a nice and you'll percent bubble like Dustin Johnson and Jordan speed since and Rickie Fowler and all those guys. I think there's a lot of interest in it from those of us that love it but the question is will Lee be able to turn the younger generation toured. I'll just give you one example that can when I was out of Seattle recently. In fact a last year my wife and I played we are the US open while at chambers bay and and when I talk to people there about how popular golf was. Out there they said ask not really popular out here and it's because people ride bikes and Heidi they're also the starting golf was seen as almost too old person now not to do and and so as a result it certainly it was a warning signs for me. That you know you look at we are the demand is gonna be eventually Paulson a slow down on how much golf he plays so. What's the next generation gonna do and I would look at those demographics before considering an in Iraq and investing in a company having some indoor golf. Always come back there's an apple story and Amazon's story and a very interest ensuring the Wall Street Journal about what's happening with bricks and mortar stores across the nation that's more merger and disciplined strong financial form. This is tall Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what you need to take a look at your investments and retirement plan called my office of 808897275260. That's 888972. Plan. Securities and investment advisory services opportunity for me to prevent remembered today as I can sequester investment management is an affiliate of mismanagement grouping concluded in Washington can domestic. Hi this is Donnie Nelson if you're fifty or older here's a suggestion. Commit to getting your financial house in order over the years you worked hard took chances made sacrifices. And built up as much wealth as possible so you'd never run out of money in retirement. Well. Now it's time to get organized and to make sure you have a financial plan. Who protect your retirement. If your financial life together. Call Paul Parsons at planned strong investment management. A schedule financial checkup call 8889727526. That's 888972. Plan commit to getting your financial house in order call 888972. Plant or visit planned strong dot com. Securities and investment advisory services offered through next financial group pink member camera SIPC plans to investment management is not an affiliate of next financial grouping and is located at ninety to Washington street Dedham mass. No. Ground zero for your financial news and economic commentary. This is the plan's strong financial forum where all Parsons President Obama plans stronger investment management yeah. And I'm Ken carver introduced along with the ball and we're talking about the business stories investors need to know about them Paul. This interest you sure you Wall Street Journal about retailers and end what what is going on within the best proceed the bricks and mortar retail. Well it turns out that retailers are not closing their stores fast enough or maybe it's a little bit a denial Camaro in now and you know if you look at what's happening is. Sales have been tumbling for department stores and mall retailers for awhile you don't need to be a genius to see that you go when you see the level of activity locations right at the same time you look at the sales stats for the Amazon's and even the on line segments. Of the stores like Wal-Mart it's developed a big online presence as a result. But but the problem has been that having a lot of physical stores. Obviously is a financial burden and so you would think geez if they're not selling as much I should turn him off. On but the problem is couple things first of all they have long recess so it's really hard for a company that may be cash flow positive on a store. Are they even though it's slowing their growth rate. They wanna keep it open because what the hack or already paying for the least cost anyway and we signed a 51015. Year lease run at the same time so. It's it's very difficult for June to do that and the second thing is a lot of these managers are paid incentives based on sales. So they may get more sales overall. By having a store and online now but it probably doesn't make the most money most profit. For the company at the same time so there's a real problem as it relates to aligning incentives. Are for these and it east that still use a lot of bricks and mortar stores I think the future is really out. Four you know these chains that have a large large number of stores does the thinking at least at the journal. Is that that the number stores that knee jerk. Outlets will have will be may be tour 300 nationwide. And not two or 3000 or twenty years 30000 literally two or 300 stores is probably the right number and by the way not only did you do they use the bricks and mortar stores show Laura for them but they Aussie is at a distribution point for their e-commerce at the same time so our serves a double purpose so what should investors do if they're looking your didn't do investing in retail companies well certainly identifying businesses that reduce their fiscal footprints to a minimal number of stores is probably a good indicator and of frankly smarter and better management console I would certainly be looking at that and and you know what do you if you look at JC Penney for example had an awful goal the last few years and he did didn't see them happening fast enough and I think that this is another example of looking at legacy businesses. Day you're either going to you're either gonna adapt or you're gonna die and which ones adapt and which ones die and I think you have to look at that as an investor to say which ones you think are the winners potentially the winners and which ones. Our whole lawn and not make changes as quickly as possible as are raw as a result running through cash and Amazon has indicated they're. Moving on up into the shipping business earned while also Amazon is you know kind of the business that is the massive disrupt or for so many businesses including those bricks and mortar stores we talk around right. I mean Amazon's. I deal as you go online they don't have bricks and mortar stores all of them there one or two in the Seattle area but very few rate. And so you know they are killing these bricks and mortar stores because if you don't have bricks and mortar and you don't have to pay rent which means your total costs are lower than everybody else which means you can charge less which means. You win now okay. And not Amazon has now indicated that they have that are are getting into the shipping business. And in the shipping business they've signed leases for about forty very large aircrafts that are craft that are used for. I'm not shipping and on long haul routes. And so the obvious question you know you when I've talked about this a lot anything that Amazon gets into we sit there and say oh my goodness I would want to be either competitor and that's our dark and we talked about grocery stores that they're getting into groceries and and online grocery orders and point you look at that you see me and they distribution better than anybody so we wanna be a grocery sorry now right. Are they did books write more Barnes and Noble's literally no board personal that they're mostly all those gone they're gone Greg why Amazon knows how to distribute books right and so forth so the question as well if they decide to get into the shipping business should you worry about the shipping companies are true America and I like UPS or FedEx and so forth rate. And though there short answer is it's surprising. But Amazon only represents about 3%. Of fedex's business is not as fast as it is and it's just a larger proportion of UPS but still money huge number and so the short answer is even. If if somehow Amazon took over all of their business not just that the long haul routes but all the local deliveries and everything else. It wouldn't be catastrophic to FedEx would be their best day no but it certainly wouldn't kill them as a company and so. I think the short answer is you know at least for now. That that trend seems to be. Of allowing FedEx and UPS to have the big planes in the long haul routes. And then what's called the last mile of delivery on that's more were I think you're gonna see increasing competition for who can actually get it from that hub from Matt's the war from that distribution points that warehouse whatever out to your Dresser Meyer addressed and that's worry think you're gonna see hyper. Competition whether it's. You know unused capacity for our right sharing services like over her and there certainly are discussion about Hoover tried reversed. When they don't have somebody to pick up instead of picking up people to pick up packages and they deliver those packages. And so you think about that and whether it's that are drones or whatever else that Latin vote the last mile of delivery last several miles of delivery that's were concede much more competition. And I think from Amazon's probably doing this to do a bit at their core. But just Morrissey as a a defensive move and anything else it probably is a negotiating move as well with the major carriers is only so long haul stuff. Pulls some news out of China regarding apple not good news either know what was just in Beijing and here but in the city of Beijing regulators have shut down sales iPhone six iPhone six plus. Which is kinda big news. You know don't forget Iran China is a big market. 22. Actual ROK in fact 25% of Apple's revenue came from China not like I said this is just Beijing the Beijing is one. Every big city you're OK I don't know fifteen million people aren't. That's a lot of people with a lot iphones and they turned it off and he did it. Are based on frankly a regulator. Didn't men it had to do with. On a complaint filed by a competitor of apple saying that Apple's designs in some ways reflected their designs don't mind you. A follow up story this was that companies now are business. OK I think David nieman survive aren't but they filed this complaint here a couple years ago and now the Chinese authorities have stepped yen. Why we're bring this forty to our attention the reason I bring it is because China has their own rules and you know whether it's there were combing rules and and frankly they're a bit murky. And so you know you certainly can be concerned about what financial statements she gets from firms that are operating in China are they really accurate. I'm but also what government can do government can decrypt capricious and by the way there is there's not a lot of re course as the US company. That you can get out of this and you know Apple's been trying to baccarat at the Chinese authorities in fact. You know they just invested a billion dollars and DD I talked about that drastic remember the Chinese rigel a lot of slaughter that's a lot of Obama. And literally a week later our Beijing came out and did this in turn off their sales you know in in not Beijing so. You know you look at that and say isn't some market data is gonna be as unfettered as the US I think the short answer is no not even close. And there is real risk to that so you know eat when you look at. China has a growth opportunity for any of these terms you have to color little bit with there is risk there that we just don't have the same kind of risks shortly in the developed countries. You know like the European Union or certainly the United States. Now Paul another story about apple and this one has to do the fact that they may not be releasing another phony and they've been doing every two years a new farm yeah five this six exactly so every year they do like a major release every other your forgive me here. Every other year they do look a major release and then every other year they do kind of some minor improvements right now and we seem well there were due for one is right all right you know the six and six plus came out 2014 and being 2016 you'd say. Where's the Sabbath and the six and six plus we elegant from an investor perspective forget the consumer perspective from investor perspective the reason this is so important here was this an investor you're saying. Okay the last time they did this we saw 40% surge in sales are OK so if they got some really wizbang here then me and we could see some increased sales again there's a lot of activity. A lot of interest in this because it could mean a lot of money to investors okay it looks like the seven is not gonna have the game changer really huge. Big on changes to beat the structure of the product seen in in certainly the sex word don't forget the sex went from your small screens to actually Samsung's owners are now six and six plus we're going directly against the bigger screen once. It looks like there improvements that talked about for the seven are really two fold count one is that they're gonna get rid of the home but no the button on the bottom you press to get the things attention and the other I change has to do with the headphone plug. But they're gonna eliminate headphone plug which is good because water tends to get into that headphone plug and and create problems with the electronics. So it's gonna help the reliability. You'll what you shot Elissa let it go well okay that's kind of nice Britain. I wasn't doing anything that doesn't flow might vote for brash group because there also means that you have dual wireless headphones or maybe you don't wanna do that don't you don't have to know normally you don't what they're gonna do is. The job firewire is gonna double. As also the headphone months they're gonna they're gonna get it to do two things at once had less cluttered it is but here's the here's the thing. Longer term to all the whole reason that they couldn't get more packed into the Cisco is the technology wasn't quite ready. But the big thing if they're working on now without a doubt has to do with OLED which is an organic light emitting di di -- our screen and it goes edge to edge so what's eat it's even bigger than what does that things look like today as far as screen covers the entire. Hand print or footprint of of the thing that your holding it's also can be on can be bent. And the idea eventually. Is you'll have an iPhone that acts like a credit card looks like a court today's credit card only bigger and it's going to be classic and you can bend it from and it will be have an incredibly vivid dot picture to what. But at the same time it'll be much in us more slander and I'll be done literally the form of a large credit card that's where their golf. Paul when we come back it's that. Elon Musk Tesla story that we must have come because they know you wanna address that when we return to the plan's strong credential for this is tall Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what needs to take a look at your investments and retirement plan called my office. 889727526. That's 888972. Plant securities and investment advisory services opportunity financial group member to me as I can sequence from mismanagement and billions of mismanagement grouping whose movies in Washington street dimension through Tuesday. Hi this is Bobby Nelson. People use different strategies to acquire enough money for retirement. Some try to do it themselves others buy insurance for investment products well sometimes will benefit the seller more than the buyer what makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to act in your best interest. And be paid the same amount no matter watcher invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment. That's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial grouping member former SIPC plans to investment management is not an affiliate of next mention grouping and is located at 980 Washington street Dedham mass. Finally here really your show is not trying to show you insurance or movies. This is no plans strong financial forum football portions president Paul plans strong investment. And I can Garber at the anchor desk along with all of you remind you Paul still free number he needed 9727526. That's 888972. Planned we can go online to play and strong dot com. And would you like to do this it is set up a time when you went to meet with Paul and his team you will meet with ball. And donors analysts to go over your portfolio it's an obligation portfolio review the Paul will be happy to put together. And we talked about a little bit earlier Paul in itself so did you say takes about now ourself. Exactly right but we do this we understand what your goals are and then what we do is say based on your goals. Jurors would probably need to fund that. And we talk a little bit about some what your investment portfolio looks like today and what and it's frankly we would probably suggest four and based on economic conditions and market conditions today and Paul one. Other things it's important for people to remember is this the information you provide in the show this is the type of information the research that you do for your clients. On their behalf. You know just on the Braxton alone now it if I can tell you we probably had sixer but more than six or rate indicators that we are following for the last several months watching us ot it it's more than saying apologies will polls look like you know they're honest they're they're gonna go. We were looking at a variety. Of a financial metrics that frankly predict behavior much better than polls do when and an example I gave earlier in the show as I have talked note I was one of the Red Sox game. One day this past weekend and I said how do you think the Red Sox indoors at other gonna win. And I sell really wanna bet on that and he said no. And so when you know it's one thing to say what you hope would happen but it's an and that's a polish frankly as opposed to you know putting your money where that NS and and you know we can look at financial metrics. To really help us understand not just the hopes but frankly where people are voting with the beer money. Brian and based on that were able to help our clients make I think better educated decisions. As it relates to what we invest in and what we avoid I think you know you were in debt and by the way to sort a lot of people called tea leaves. I don't called tea leaves and his column you know indicators that we think are gonna work right and and you know some of those indicators are things like corporate bond spreads in the UK and you know that the strength of the British pound sterling and whole bunch of things we looked out. And by the way also what the betting odds work because again somebody's willing to bet on would save backs air mom you know in the UK and as you know I said earlier they bet on everything in the UK. On you can you get an idea dare to whereas the money because you know a lot of people will bet with what they think is gonna happen as opposed to what they hope this. Bryant once again also free number eighty 89727526888972. Plan. Or you go online to planned strong dot com. And set up a no obligation portfolio review. And you know one example of that Kenny and analysis that we use to justify our position on things. Has dual oil. You know if you talk about were we were back in February of this year right calf in all we were there at the price of world's 26 bucks a barrel and you had all conscious pieces and CNBC people in Kramer and everybody screaming from the rooftops that oh my god it's going to twenty it's gonna fifteen how low slow a lot of the stuff. I wrote a paper for our clients based on and I did us I literally built to supply Kurth. I showed them the supply curve look like not only on the total cost basis put on an incremental cost basis. And said hey unless the demand for oil drops by two thirds around the world. Then cures for a price boils going to be in the next year now OK and you know what we said we thought that the price will be about fifty bucks a barrel and and you know the price well right now is between fifty and 51 bucks a barrel were not too far off for an error and I don't know where it's gonna be next year what I can tell you whiz. Over time over the next two or three years I expect the price of oil to rebound the 7580. Dollars a barrel it's not what I'm. Hoping for I'm not what it's it's much more than that it's based on supply and demand analysis and understanding the market and understand the cost structure of each of the producers. So it's not just oh geez I hope bomber right. There's a lot more analysis that goes into this that then becomes the foundation for how we invest our client. And that's embarrasses you park your car or sport Korea us every day and bold we mentioned before the break this story about Tesla Tesla involved in a solar company explain this to me well it's as good as it gets I mean if you think that the Clinton foundation has trouble wait till you hear about this okay. Task slot Ilan mosque announced a the intention of Tass slowed by solar city. And their solar cities the company that installed solar pound panels you know in US residents look on roads and start right. On ending today offered about two point eight billion dollars or about a 15%. Premium. To what Tom's solar city was trading at. A couple things you should probably know first of all solar city was down 60%. This year so far of the stock is down a lot of this year. Nothing should probably know is that Tesla shares dropped 15%. On the news. And so at the same time solar city shares increased by the fifteen or 20% and here's the deal. What I essentially Kurt. Was that the entire value of the purchase was lost. In market value by tax locking in other words the market looked at it and said you guys are crazy and another thing you should know is that the guy who runs. On solar city. Is. Yeah that's that's my that's my Clinton foundation little jab right direct. And both of them have recused themselves from from the board decision of course but you have to believe that there's some influence her but here's the thinking behind it they're thinking is that is Tesla ramps up production of batteries for use would solar panels. It makes sense to integrate the two firms as they are already ramping up for batteries for cars right. And so yeah I mean that was mosques kind of selling point the markets absolutely did not buy it and you know why the markets didn't buy it. The difference between Tass slot and say cool or animus on our site FaceBook. Is that when you talk about Google or Amazon or FaceBook you know we're almost three of those companies have not they have cash businesses that are making. All kinds of money here and Amazon's case it's Amazon Web Services the cloud computing right their they are generating money hand over fist. So they can if you will subsidized other businesses that they decide they want to investigate okay. Whether it's groceries or something else in the case of FaceBook. And the case of global they have all kinds of chat revenue coming in and try our sort of subtle arm to do Google cars and all and end you know FaceBook is storing virtual reality right they are funding that with real cash cows that are coming in to their businesses. Now you go to Tesla. Tests was run by an equally brilliant man Ilan mosque by all accounts I've read the book the guy's a Smart dude nobody's you know in any way contesting that. But here's the deal. They have more death and they know what to do what it's an incredibly capital intensive business to think FaceBook Israel capital intensive business. Not especially road building and you know and and so you look at that and you say okay it's a capital intensive business they have a tremendous amount of debt. That they need to Serbs have to pay interest payment on that right. And the same time they're trying to build factories they're building a factory that to build the new gig a factory out of the desert right. They're gonna actually try to sell half from the produce and sell half a million cars a year by 2018 which is by the weight tool years from now home okay. But that all takes a lot of capitals a result Tesla is burning through cash like there's no tomorrow well so what solar city. Okay their burning through cash as well he got to cash burners and I'm looking for where's the cash cow there isn't one. And more importantly if you look at the market the air saying what is Ilan mosque thinking he's got this is all us is gonna do is distract him. And his company. When they have their biggest deliverable yet to get across the line which is. It's not the model lasts it's not the model X those are both very low volume cars it's the model three man. They're the basis for Tesla as market valuation. Is all about being able to finally sell a lot of cars in the market and they can't do it. Then they are valuations gonna go down a lot and you know incorporating. Yet another business that's another cash burn or in that this thing. Just what the market looked at that said we think this is a terrible idea so you on mosque for the first time. In a long time is no longer the markets fever pitch. I'll wait a minute the darling no there was an article in the Wall Street Journal a bowed to government subsidies going to tell us who also have a we talked about this and you know I've not been the biggest fan of tassel and again I can't recommend on the show a suite or in any kind of a blanket buyer sell recommendation for anything but. I can talk about whether or not I like their business premise might elect us and I think you won Moscow is brilliant. And I think their automobiles are magnificent and beautiful cars. But the question is do you invest and and you know for firm he I have to Knoll. That it's a sustainable business model and one of the things that really it's been concerning to me that I've talked about on the show many times is the fact that Tesla relies on government subsidies. And you know all it takes is a change in government. How much are no longer provide those subsidies and all of a sudden what used to be a nice business with a nice cash flow doesn't have. The cash Lawny Marcus and aka the subsidies anymore right and you go from an investment that. Use attorneys she said man I'm gonna retire on that investment to an investment that becomes worth much less you say oh my god. So here there was actually an article in the journal suite that I thought was incredibly well written that talked about the fact that. Tesla right now gets handouts from the government about 20000 dollars per car that doesn't include the semi 500 dollars a car that individuals get revealed by the car yeah okay so you think about that those are huge and incentives and by the way. Colorado has a state tax credit of 42000. Dollars if you buy a certain kind of attacks okay. And you sit there and you say oh my god. And guess what's happening. People are starting to rule you know not be so wild about seeing their wealthy neighbor with the new Tesla that has all these subsidies aren't yet. You know they're cutting Social Security for people we can't afford you know to not have Social Security there right so I think. What's happening is government subsidies are released will probably become more and more. Under that the gun. And a Tesla again this is just a heavily subsidized company and all its debut as investors beware sometimes these don't work out so well. I'm not suggesting buying or selling. And suggesting investigate. Before you decide how you want to handle the security. Once again fall program chock full of good information balls toll free number eight DD 9727526. That's 888972. Plan or go online to plans strong. Dot com. And you can set up a no obligation portfolio review with honesty and enjoy there is the weekend Paul have a great weekend everybody disciplined strong prudential form. This is tall Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what needs to take a look at your investments and retirement plan called my office of 80889727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can sequester investment management and billions of mismanagement grouping that is located in Washington street domestically and six. Castro investment management is located at nine media Washington street Dedham mass or to go to six and to be reached at 889727526. Securities investment advisory services offered through next financial group ranked number fender SIPC classroom investment management has not affiliate of net financial group think this radio show is for informational purposes only and is not a solicitation recommendation that any particular investor should purchase or sell any particular security information contained herein is obtained from sources believed to be reliable but its accuracy and completeness or not guaranteed neater next financial grouping category represented of provides talked about.