Feb 25, 2017|
"Smart investing, simplified"
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
From both plans stroll in the broadcast studios kids would play in strong financial forum will be your host. Kendra are very humbled president Clinton's role you're best about a month. Full portions it's time Bruce Morton investing. Symbian phone. And hunting career the anchor desk along with Paul Parsons phone welcome back to the program great to be here it is you know we've rehab center institute pleasant week it seems as though I I should be saying happy spring was great and just just really weird and yet wonderful yeah you don't also nice about it I don't know about you but commuting to work every day when other public schools are under and I know how critical traffic for we know school bus for a week pleasant weather and node and and no traffic the windows were down wave was surely nobody nice guy I think were going to. The tundra now and friends tourists and here we problem. You know first of those folks out who are just coming back from your trip to Florida yeah. You know you you you missed and really nice week here you leave we hate it when they come back with Sundance and and bird still shoveling snow blowing up the pour me and Florida experience weekly recently we hoped and we actually finally got sixty degrees even in February and masters I don't know if it's just that was fun. I'm you know it's funny talking about how you can get a week at that can. Changed the way you look at things yeah. Just what's been happening this year is every wish you every region and changing the way we look at things it's really and different function of the program he had his finest shows it's our weather show no no we're not very good at what I know and I do regret saying what it was we always tell you what we had been netstat and over broad which probably qualifies for being a weather per hour right because I and were right as much as the weather people don't point the right direction I'm one of those greens Greenwald together yet you have to go but that's yet they did this says has been a year really that is just been so surprising. Considering where we were last year yeah coming up in the showroom will go over some of the business in new stories of the week that investors really should be paying attention to our group we're going to her. Talk more about the Barron's roundtable outlook which started at last week yelled let's finish that up to justice or some good stuff on that actually serve Justin this is what the roundtable says Tony seventeen should look like excel boom paying attention to that. But but let's just remind folks grow where we are now there were where we were a year ago me. Isn't that stunning didn't think about it I mean think about it a year ago. On the S&P. Up just almost exactly at this time yes and 500 which is an index of 500 largest publicly traded stocks. Hit a low around 1830. More Hank Aaron and right now the FCP is trading at around 2360. Now you don't have to know a lot of math the state 1830. Vs. Verses 236 yeah that sounds like a big move stepped it isn't really mail through it you know and so that. Think about that how much. It better things are today the price of oil was 25 dollars a barrel back in mid February 2016. And the price of oil today is somewhere between 54 and 56 bucks a barrel. That is who acts think about I mean has just stun me so with all of those changes. You know that this question is also are you invest at the same way you were a year ago because. If you are I would argue that that either you work properly positioned a year ago or you're not properly positioned today one of the. I don't read and that's good point if you work properly position your go or in part frankly six months ago. And in if you have to look Jeremy me changes that almost by definition means you you're not properly position now while what if you think about it Kenny some of the stories I'm gonna talk about today I'm gonna talk about many things to do with president trop now was president trump even the elite. A real stick no no two words to put together earlier a year ago the Rowell right. So you know you most people were anticipating. Either or different Republican or more likely. A democratic president and at this time. And that didn't happen we got president trump OK so if that's one thing and the other is did anybody anticipate that Britain would be leaving European Union and there was even a growing chance that. The European Union itself was gonna be fighting for its own viability. On because of other national elections that are going on right now and so there should the short answer is. I'm a lot of the stories we're gonna talk about today were almost unimaginable. A year ago right right and if that's the case then it makes no sense for you to be invested the same way you are today that you were a year ago. So folks want to give Paul Kirk. All because it really would make sense is what Paul does policy MB happy to sit with view. Go over your portfolio. And make sure that you aren't properly position much you know gee here's how you were sent a beater goes here's our sort of now oh and and show you how that may or may not make sense. This is the college wanna make a DD 89727526. EDB 972. Plan or you online to plan strong dot com and send me email. And you know of the the important thing here too was it's not just power you position this is. This is the that an. Engine of your financial Milan if you don't adjust the engine to the financial plan a slur lake you know putting the choke up or down in the snowblower now. In our they won't start if you don't you know you could show properly but at. After awhile if you keep the that. Actually stops the snow blower from functioning properly you have to make adjustments to what it's no different to offer that in that circumstance. Then your own financial plan and you have got to adjust your portfolio. To have it fire the best attempt to actually have the engine work the best and if you don't the probability abuse successfully meeting you were financial goals. Will go down pretty dramatically so. Not only do we help you by adjusting. Your portfolio to the right Kuo you know fuel mixer earlier but also we adjust your financial plan to make sure that we did this these adjustments what does that us actually due to the probability of you hitting your financial goals. So we do a full financial plan for US while so it's not just investment management it's also financial plan and we do for all of our clients balls shall. Remember once again EDB 9727526. You don't wanna leave money on the table 888972. Plan are followed up some business stories plus I'm saying you know all week and you know what it's one of those weeks have you ever noticed that when we get a Monday off like it was president's status slap right shortly here do you feel like you got five days worth it worked on on four days until exactly you know that sometimes it's worse she initiated sometimes it feels like six days and four days you get a cram everything and the Florida. I was at my desk in my office every night to about 7 o'clock this week and and literally every single day. I was sitting there thinking in my eyes I almost an even notice what time it was so much stuff was going on the same time. So in the trading world what happened was of course Monday it was a trading holiday in in in observance of President's Day camera but are Tuesday through Friday we'd definitely has some trading activity overall. US stocks were up just a touch just a little. Less than half a percent this week and international stocks were up a little bit more but not much overall I would say. Yeah if you look at the beginning of the week in the end of the week. Not much changed regarding current and year to date though the S&P 500 which I've mentioned as an index of 500 largest publicly traded stocks in the US. It's up almost 6%. In the first two months of the year and that is just unbelievably. Good. And international stocks are about six and a half percent during the same period of time so. It is really hard to find somebody who doesn't think that the first. Of what happened in 2016 don't forget in 2016. Which we started the year the first six weeks we were down ten or 11% in our markets. And then rebounded meet up all of that plus another eleven and a half percent. In 2016 who's just stunningly good year 2016. And also we start the year on all cylinders. In 2017 from a market perspective. Now he usually. High quality ball on the price of our quality bonds will go down on the market comes up but I can't really even paying into that did well it it. We've seen that not happen I'm a few times times lately right again this week it did you know it this is one of those anomalies are you say women. The price of stocks went up not much but they went up a little but the Swedish so the price of bonds should have gone down a little but the suite which yields would co op price scored count on Ponce. And that didn't happen the opposite happened mug the prices of stocks went up a little bit and the price of bonds went up a little bit as well at least for you ask bonds and German bonds and the reason for that of course. Has to do with uncertainty around the rest of the world's relates to the Euro zone let me explain that just a little bit more. If dairy is a concern. Not in the US with US stocks around the world. That the European Union may disintegrate because of for example the French electing someone like Marine Le Pen. Who has. Really big east her candidacy. On the on the premise of if you vote for me France will free access. France will leave the European Union armed and if I were to happen that would probably be the death knell for the European Union as we know it. So what's happened is because the probability that's gone up a little bit over the last all month or two months. Armed then what's happened is. There has been a rush to safety and by those who were investing in Europe and elsewhere because they are concerned. That that France could leave the European Union could I disintegrate. And and if that happens and what they do they try to buy high quality bonds. And bid up the price of those bonds what are those fossils are German bonds because Germany. Dare dare currency would be strong if they were leave the European Union stronger than the rest of the currencies and the US threat because the US currency would also be strong compared to European other European currencies sweated so that's why we see some of those prices being driven up a little bit and started it is and and you know again I'm you know I'm sorry to get into the weeds on that one but I'm all on getting out is it it does make sense from time to time and typically. If you see that in the United States it's typically because of something that's occurring internationally at the same time impacting the bond market while our stock market's doing. All warm welcome back we're going to look at the US dollar oil prices. And a lot of mordant numbers that we really should be paying attention to some data from the government when we return to supply a 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 station if you like what you hear on our show and what immediate 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 to go as I can see classroom investment management is an affiliate of mismanagement grouping is located in Washington street domestically and 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 plan strong investment management to learn more. Call 888. 9727526. Hiring the right advisor could be your best investment. Or visit planned 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 mention grouping and is located at 980 Washington. It's. It's. It's. It's. The. Crumbled and strong broadcast studios at the epicenter of capitalism. This is no plans strong financial forum group called Parsons president of planned stronger investment members. And again burglary at the anchor desk along with the ball blog posts toll free number once again as he needed 89727526. And were talking about I was. If if you're portfolios set up the way it was last year while you may be time for some change so I. If fall or call babysitting with Paul and his team to take a look at that as you mentioned not just look at your portfolio but overall printer that's our plan. And one needs one if if one didn't have one before did you realize now hey you know what time time to get a plan in order because. Things are changing rather quickly ADB 9727526. That's ABD 8972. Plant a pole for the break we're talking about the bond market up and and and is part of that week we begin into the a probability that the Fed in the US will increase. Interest rates and that obviously that plays a part so what does that we're going now. Well I'm gonna talk about this a little bit more time in it for little little later on in the show him out on information that came out this week. But the probability didn't change much this week as it related to stand funds futures. On and and dare probability. Of the Fed increasing interest rates. In the march timeframe it's still looks very unlikely it's right now about 22%. Expect a rate increase. In March but on the other hand I'm 52%. Expect a read increase in the many needing so but I do wanna talk about a little bit more because some of the Fed governors came out this week as well as you know yell on herself and I want to talk about kind of how that. On May play out coming going for Brad what about the US dollar. It was flat also this year this week against the Euro and the yen its trading right now about a dollar six per Euro so it's good time to go to Europe if but a 113. Yen per US dollar and it continued to weaken against the Mexican peso is another story I'm gonna talk about. What's happened with our emerging market currencies. I'm compared to the US dollar recently because as you'll work call. When president trump was first elected a whole bunch of emerging market currencies just can't pummel right. And and it was because of protection strategies and so forth that were being anticipated that would adversely impact. The I'm the strength of those currencies compared to the US dollar. Talk a little bit more about that as well almost as to what's happened but don't get all giddy about the Mexican peso instill. All you know six or 8% lower. Van did win our trump was elected president on November when oil prices up a little bit marginally in all fifty cents a dollar a barrel. Right now west Texas is at 5450. A barrel how our branches around 5650. A barrel. And crude inventories were just up very very march lesson that was goodness we've seen some big pops an inventory the last few weeks. That one away this past weeks and that's good still 9% higher though inventories are 9% higher now than they were a year ago. That's not terribly good news for those wanna see the price of oil go up and inventories are museum excess inventory and wanna get rid Everett's civil flood the market with the would shall drive the price to outside you know again though the market still looks very full of oil at this point at you know 9% more inventory than it had last year at the same time they are the non OPEC countries cutting Barrick and own in the production well it's interesting you ask that the that the OPEC countries look like they are. Up purchase of dating to the degree that they said they weren't as December meetings when they struck kind of the grand deal saying look we've got a cot. Overall output from from OPEC countries and then a bunch of non OPEC countries were also post also exposed to join in with. Voluntary cuts I guess they've come up with a what do voluntary means Augusta so far Russia Mexico and nine other oil producing countries. Have cut about half as much as they had me committed ticket to Conning and you know the cutter minister are out who represented open accent hey we've noticed yeah so. You know more to come on us hopefully they will. Continue to cut their output to the degrees that they had on agreed to because if they do then I think we could probably see. The price of will get closer to sixty dollar target that OPEC really would like to see that by the end of this year. Now very little government data was released anything we should be paying attention you know not much. Our most of it was good promotes the dinner was good. Our manufacturing. In February looks respectable there they there's a I think called flash report that gives you a glimpse of what. The official numbers sure look after the end of the month and as you know we're not quite at the end of the month yet. That flash report came out and they they showed that expansion was. Still good but it was slowing a bit from prior months we'll see what that means. The good news was existing home sales were strong and not at an annual clip of about five point seven million homes a year being sold. Which is up from about five and a half million in December. And dissent are single family homes were nice and solid as part of that. Overall though year old three year or 4% increase. Are compared to where we were a year ago so good not great but you know certainly not negative Jewish continue to see good numbers from initial unemployment claims also this was the last we kind of major piece of data that came out this week. And you know we've been talking about the saying. I'm you know anything under the 250 range is really a strong number of people being on going on to an unemployment for the first time the number this week was 244000. And you know it is it is just a very very good number let me just put this in perspective for you. The four week moving average is now what its lowest levels since 1973. Of OK okay and and by the way this was the 103. Straight week. So if you divide that by 52 that's almost exactly two years. On that claims remain below 300000. Winter when we hit that 300 number we and we sent our king now we're getting healthier. Well we had to whom years every week in a row has been below 300000. For the last 103 weeks. And you know that again shows a pretty gosh darn strong labor market. Paul blended Donald Trump was elected one thing that you talked about quite a bit was the possibility of Alba and income tax overhaul apps and we're starting to hear about that now what are we hearing in board what should we be looking forward to. Well it's not just an overhaul its caught now there's a difference between an overhaul. And a cot. And overall can mean oh well we're gonna tax the rich some more as opposed to a hot guy which means we're gonna reduce the marginal rates for I'm either corporations. Or certain individuals and so forth that's what trump this kaposi's he's proposed really three cuts. One cut is a cut in the corporate tax rate from 35%. Down 15%. That automatically would lead to higher earnings come from companies and OK because you're not paying 20% of your earnings and tax anymore. Well people keep 20% more of your earnings growth that's a pretty powerful thing and second thing he's proposing. Is armed if you will only a relaxation. Of the corporate tax rate on profits earned overseas cash to its overseas. There's currently 2.4 trillion dollars of corporate profits. There are if you will of you know kind of more wounds from Tom offshore. Debt that companies have been reluctant to repatriate to the United States. Because the minute they repatriated. It gets taxed at 35%. And there's some big companies lose some big money you'll starting with Apple Store near zero start and end there while we are who are apple has almost 10% of us are caught tickets over 200 billion dollars of cash that's overseas. Would trump has talked about ODs is. Kind of a one timer a one year repatriation. Of cash that would all of these profits them would essentially dropped the rate from 35% down to 10% mark on that and in all of that would be terrific to get that money back to the US to these companies because they could then. Use that money for further growth within the US and the third thing that the trumped tax cut is really talking about is the simple for its individual income tax and it really has to do Kenny. With on simplifying from I believe it's seven or read in our brackets down to three moon and then secondly lowering some of those tax brackets so that. For example the highest by a bracket for taxpayers currently is 39 point 6% aren't that would drop to 33%. And so. It's it's a tax cut in reached for some people it's also higher deductions. For people as well so frankly de less of their income would be subject to those rates as well. Are we hearing anything or Washington has to win this might start well that was the big story this week sorry again for that the little sideline their but I wanted to make sure people knew what is really in play here and why this is so gosh darn important. For economic growth you've you've heard what I said it would do to corporate earnings think about the stimulation would provide two individuals when they get a cut rates as well as well as more deductions. This is the rocket fuel for economic growth so I'd been watching this very very closely and the best news I saw this whole week in fact I just smiled when I saw on the front page the journal one day this week was that. You know the incoming US Treasury Secretary announcing who's gonna try to secure. The tax code all over Paul by August before the August recess. And so of of congress so. If that were to happen that would be just terrific for our economic growth and the reason I say that it's also frankly I believe to a great degree already beat the end. To a lot of the market activity seen so far unfair you know just think about it this way the market was up. Are several percent following trumps election I you know call at five or 6% following his election in 2016 it's up another. Are almost 6% this year. And a lot of that is predicated on better corporate earnings and you know I've improved economic environment. I'm associated. At least partially would this tax cut. And by the way that's the other thing at the incoming treasury sir the car tertiary sector secretary said mentions set which is. They are shooting for sustained. GDP growth of 3%. Or higher. As compared to dock you know kind of the one point 8% that the Fed. Has forecasted to wheat seed for the next you know all over the longer term of course immediately this was met with Cooper whose. Buying those in the media but I gotta tell ya. I like a president and I like the Treasury Secretary that at least is shooting for economic growth as a post and not even addressing economic growth. And these guys are definitely shooting. To get to kind of hold America back in to a higher growth rate and we're it's been sustained for the last 063 years easily. Although we come back will died a little bit deeper into what the Fed is saying about interest rates we also are some stories from Tesla and Google and more will also get to that roundtable discussion Toledo look of 2017. It's a plus strong financial form. This is tall Parsons president of planned strong investment management. And you're listening to them plans strong financial performance WRKO. Boston's talk stations. If you like what you hear on our show and what they need to take a look at your investments and retirement plan called my office it. 808897275260. That's 888972. Plan. Securities and investment advisory services offered through an intranet to prevent remembered today as I can sequester investment management and building business financial grouping is located in Washington street domestically and six. Hi this is on he 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. 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 a plan strong investment management. Just 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 linked member tumor SIPC plans to investment management does not an affiliate of next financial grouping and is located at 980 Washington street Dedham mass. Finally a way to your show is not trying to sell you insurance or annuities. This is no plans strong partnership for a quick poll portions. President Obama plans strong investment. And I'm dense cargo area at the record does belong with the ball Parsons in his plans strong credential for Amanda as the big voice judges has imposed on try to sell you anything. And yet you don't perform should go to the show they do hear me give your telephone number hunt because that that's something that you are happy to do proposed sit with them and say hey. Are you positioned properly for the trump presidency are you positioned properly from the current congress for what we see going ahead. And I suppose suppose one noble all we know Tressel anything poll why when I sit with you. Yeah sure and the answer is were fee based advisor we we advise people. On how to invest their money and we get paid a percentage of their portfolio and on and what were really doing is trying to help people achieve their financial goals which we also do for them by doing a financial plan for them as well. But in the end. Listen the most important part your financial plan. Is the engine that drives it around and sell it. To me it's so obvious that if you don't have a good engine I don't care how good the rest of the car locks. You're just not gonna go and knock gonna get to where you need to get fit and and so we focus a lot in this show. On the engine which is. What are we considering when we do not investment analysis and ultimately investment applications for our clients because. As you said so well at the beginning of this segment com you know think about or we were a year ago compared to today and it's deal on striking. The difference of the economic environment you know we were a year ago. At this very time. There was very widespread concern that we were about to and Turks. A recession aren't already there are you brain were really toward Cuba and it certainly an awful lot of talk about all the markets down 10% as this the beginning of the end and and so forth and oil was down you know all the 125 dollars a barrel all we got 210 dollars a barrel which had been its peak. Other prior June. Always down 25 dollars a barrel and you know Goldman was publishing reports saying critical to twenty critical to fifteen and and we wrote a paper last February insert no I mean sure anything can happen but you know cures what we expect to happen and it turned out we were we were pretty accurate or came hard to know what was gonna happen for example oil and other things are so. Having said that that was one aspect of how to play another aspect player does to his you have to adapt I don't think anybody for saw president track I don't think anybody for saw Britain leaving European Union I don't think anybody Euro gulf were saw any probability of Marine Le Pen becoming. The next president of France. All of those things are are either happens or the probability of them happening has got hung up bear creek or dramatically. And so what does it mean for your portfolio what does it mean that that trumps the president talking about tax cuts well if Hillary Clinton had been the president and looked very likely you're ago she was talking about all we need to tax the rich more on you know if that doesn't. Alter your. He which industries what the economy overall looks like and how what's gonna behave in the next you know period and then you know I just don't understand why you wouldn't adapt to those kinds of changes think about this wait till. Both Obama and Clinton were you know opposed to. On the pipeline. Approval rate whether it was the keystone XL pipeline of the Dakota accept past accessed pipeline. Fast forty year later Donald Trump in the first month and a half of in office says move forward with a Boise and and and you know it's it's unbelievable for. Stretch and I do whether you agree within our audience who now leads where the money is joined dream made under this new administration under this leadership. I can't think of a better example that it's not just forget politics and how our society what's happening society right now we're on things like tarps to our clients a lot about our. Ingesting and targeted technology. And what I mean we did our as you know we did a seminar on this conference honors last start June. And in it we talked about certain technologies that we shank. Will be the real bellwethers. For we are we are going in the future and one thing that doesn't sound terribly appealing but it's calming. Arm is artificial intelligence. And before your eyes glaze over think of EE if you could've known. That riding horses in the 1890s. Was you know if if you wrote you know raised courses and made saddles and buggies on US stop guess what you're gonna be out of business thirty or forty years later. Because of the automobile will dip that's no different than the order of magnitude of change that we're talking about right now that could occur. We have the whole concept of artificial intelligence there's a study out right now by Oxford University which is a very well reputed organization or. That says that half of all jobs done today will be gone in two years that's amazing and it's gonna be because of artificial intelligence. And again you don't have the white sits there you know believe me I have children that are working in and you know they work in the investment world. And a lot of what they do probably could be automated would artificial intelligence so ominous just as much as anybody else's it doesn't mean I have the light kept. But what it means also is from an investing perspective. I certainly shouldn't avoid it if anything I should take advantage of reform and investing perspective to at least make sure my family as well off. Well they're confronting this new reality. And so what worm going here whether it's politics or you don't like the direction technology's going or anything else is almost irrelevant to me what's relevant to me is. Okay if that's what's out there how do we make sure that our family is. Is as well office they can be and their economically well off to be able to sustain their lifestyle. Postal. In number 888972752680. Dade 972. Plan. Or Orlando plans strong dot com and just too many nobody array of factors set employment and obviously you would you worthwhile appointment simple honesty. And and just to put down is it for those of you looked like numbers and want returns kinda stuff. Just think of it this way. In ninety in the early 1970s. Nobody knew who Sam Walton once and nobody knew what Wal-Mart us and I was our kid in high school at the time and I can remember you only get around town to buy my Christmas presents. If there was a jewelry store there was a shoe store there was some clothing store there's a grocery store there was a book sure there was a movie did everything right right well. Wal-Mart became something that that changed an awful lot of that it was a paradigm shift. And it should be an Smart enough to invest in Wal-Mart in the early 1970s. With say a thousand dollars. That thousand dollars would have grown to 900000. Dollars. Just thirty years later now let me just tell you something at a market didn't grow 900 fold during the same period of time and OK yes there's some investors you made that you won or lost your brain and you and the market overall was up about sixteen times during the same period this is 900 times and so. That's that what we're really trying to get it is and what are the next. Major paradigm shifts in the way that we live and how do you capitalize on those. And I'm gonna talk about some of those stories now you know as we move forward once we get done was are true the government thanks. Let's do that this is a good government things we did hear from the Fed they release the minutes what we learn. Yeah so up in this centrist thing as I mentioned the probability didn't change much of a fed read increase. On at least according to Fed Funds futures at this past week but at the exact same time. Janet Yellen who stood the chairperson of the Fed. Said that officials might raise rates quote unquote fairly soon. Even signaling up potential rate rise in March I think that was on really anticipated until very very recently. Now she and this is what you should watch. It's gonna be incredibly important see how good the jobs report is in February OK and that comes out early in March. On the other thing that you're gonna have to watch are the key inflation. Our data points that come out and don't forget the don't look at CPI and PPI nearly as much as they look at an indicator called the PCE. Index PCE price index. And that's the personal consumption. And expenditures. Index. When may look at the price index at that that's what they're really gauging inflation by if that number comes in at something significantly over 2%. And we get a good jobs reports say well over 200000 new jobs it would not surprise me at at all deceit the probability of a rate increase go up pretty dramatically for the march timeframe as opposed to the may timeframe. And if you're wondering why is this important if you won't existing bonds and you won't especially existing long term bonds. And short term interest rates go up. You're not gonna have a good day and we your investment arm if short term rates go what you will see. The price of a long term bond probably come down and come down pretty significantly as a result of that kind of activity parents who will pay attention to that will look for the middle of march and which by the way isn't it is known as the ides of march that are meeting is actually on March 15 guys who can so. I you know that is kinda cute but the last and I did want to mention about this was that don't forget. Cesar ignored the ides of march when somebody told them that to be where have I don't know and I am not. Things didn't go so well for so I it's kind of the same thing here for our listeners please pay attention. Two things leading up to march 15 and specifically listened to our show. As we talk about what the February jobs report looks like what the PCE index looks like a song or. You know we did hear from. Tesla and Murray my daughter's next husband Elon Musk you and you are. Our first this chart and a jar and so she by the way I'm in this so what do what what have we learned it didn't look all that good. Well I date they had their Q4 earnings and you know Tesla is incredibly closely watched because talk about a company on the move their kind of the opposite of was stayed still look. Company now they've they've got combined with solar city in the last year they're rolling out a brand new model called the model three which is gonna be a much more affordable task task slot so DS church so right now a lot of people familiar with the Tesla model S which is their their big really nicely Amsterdam news and some people are even lucky enough to have a Tesla model X. Which is there really cool looking suvs that hasn't under the gull wing uniform are worse and oh my goodness a mind you these cars cost anywhere from call it 320000. Box OK so gosh let's just say one of those does not sit in the pars there I'm Nora liquor bird or okay yeah but they are coming out now with the model three now the model three is going to list for around 35000. Dollars and there's a car that can aspire to move in the Parsons driveway march but there's just one problem a huge amount of tests was market value is tied up. On the expectation. Not hold an expectation. That they will deliver a lot of those cars very very quickly and so when we come back I want to talk more about the new lows we got this last week. In the earnings call from Tesla and what it could mean deal with short tussle shareholder. All right more Tesla news other news coming up as well as the twice and Tino bloated supply a strong financial form this is Paul 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 immediate 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 them to prevent member finger SIPC classroom investment management is an affiliate of mismanagement grouping concluded that any Russian diplomats who threw six. Hi this is Avi Nelson. People use different strategies to acquire enough money for retirement. Some try to do it themselves. Others buy insurance for investment products though sometimes those 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 acting 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. Or visit planned strong dot com. Securities and investment advisory services offered through next financial group in member Fulmer SIPC plans to investment management is not an affiliate of next match of group think and is located at tiny to Washington street Dedham mass. Ground zero for your financial news and economic commentary. This is the plan strong financial forum where Paul Parsons president of home plans stronger investment management. And I'm Jen are very happy anchor desk and followed for the break we're talking about Tesla and his part of our favorite subjects because it it can baffle us sometimes how a British company does. And how people invested itself out your door your mobile we learned from Elon Musk it it in the when he had his phone call and are reported as earnings. Well you know it's not just that it's interesting because they make a cool product you know this is an electric car company on and end. If you're an investor and your watching the stock it's it's not run it's I'm 45%. Since December writes I mean it's it's. It's happened what we early December it's it's happened itself a pretty good run right now so. Obviously people are anticipating very very good things for the S and and part of what I'm trying to communicate with our listeners. Is that you know you'd be careful of euphoria and I'm I'm not suggesting you bar sell a stock what I'm saying do you was. I always look a little bit askance at euphoria and by the way I've been wrong two I remember you know sometimes. Something's out performed when I was becoming skeptical so it doesn't mean I'm always right but. I have to tell you this is one. But you start to see a few concerns one of them of course this last week as they were doing their earnings call. They also reported that their chief financial officer had resigned. I'm now you know you are you don't have to you know re too many mystery novels to know that your CFO resigns that's typically. A reflection of a perhaps aid a disconnect between the CFO and the CEO. And potentially financing strategy for example that's especially important right now because. In Tesla is life as he company. They just got Don absorbing. Our solar city. And now whole object there're also absorbing bigger than expected losses. On the the auto side because they're just about to roll out this new midsized sedan and this new midsized sedan they're spending between two win 21 half billion dollars of capital. 2 I get this thing opt out out the door dominant start are actually having models out in our July. And they're gonna go to real volume production by September. So I mean though those are very very ambitious you know I targets when you think about how other auto companies are roll out a new model or spark especially a whole new line of automobiles. Like the model three will be and in the middle of all this the stocks up 45%. Since early December. So you know you look at that and and you know the CFOs resigned and even here Ilan mosque say during the earnings call that paid by the way I know the margins on the model ass in the model acts are no decent. And that's because they get to charge somewhere between you know seven year re 80000 dollars 240000. Dollars for car there's some margin built and that they are O'Donnell as a post at 35000. Dollars for this mid level car and you know that battery costs are still very very significant when they go into these cars. So you really start to get nervous about margins well you on mosque termed. The initial. Margin associated with a mock would the model three as quote unquote horribly negative margin. It's that we are and this is in his earnings call we're stronger. Build up support her ascent and you know I guess the concerns are this first of all is demand lagging. For the higher margin in cars like the model ass in the acts listen. Those cars are beautiful autumn most of the question is at some point you know is the demand for them not as robust as it had again. That's one thing that that's a concern that. The huge cash burn rate is very very important right arm because they're spending so much in capital spending and but here's the the the real money thing here is can they produce the model three in very very large number because they've never produced anything in large numbers. Arm before and they're gonna try to produce up to a million cars a year in a very short period of time that is. That is a very tall order and by the way all of that while the stock is at all or near all time highs. And so it it just means that there is riskier and I want listeners to understand. Bullets move towards. The Barron's roundtable we talked about it last week we have some of the stories we welcome back to if we have time from snapple group Google and more but there we did. Stopped about halfway through our Barron's roundtable discussion last week and this there's some sort of humor should be paying attention to. Yeah so and let me just recap some of the highlights of the first part and I wanted to finish the last end of their sacks you know first of all that. Overall this roundtable expects stocks to perform relatively well. I in 2017. But they expect to kind of be the tale of two hats and mentioned that the first half of the year this kind of euphoria. This odd sense that you know trump should be able to get this tax cut through. On May be regulations old RG Kris a bit medial to summit is infrastructure spend he's talked about all of those things. Should a bleed through due to better our stock performance and in fact that's what we've seen. But the second half. On is more risk because of the potential for interest rate hikes we've talked about that armor and as well. And and there's a concern that got Tom you don't dare could be some adverse impacts aren't as it relates to. Will the tax reform really happen as quickly as people would like to see will there be adverse impacts associated with this this border tax. Hi and and will would do what it says it's gonna do will only Republicans work with trump. On to make this thing Maher I'm revenue neutral or will not be as robust as trump has at least initially suggested that it would be. So there are a bunch of reasons why. You should be positive are going and 2017. And what they are also some negatives that we wanted to make sure that people understood as well and and those of course included not just. Hey is this thing is the tax our return rob reform really gonna happen. But also is the market already pretty pricey and it is you know the markets already treating and a multiple that's pretty high. And so the question is is there more upside left in the multiple I'd argue not that much but I do think that earnings themselves. Have room to rise and that we will see that. But you know bet it that's a very important thing for to happen if it doesn't happen if either the tax cut doesn't happen or we don't see earnings improve the way that there are expected to improve things right and by the way facts section projects 2017. Corporate earnings to increase by 10%. Okay so it's got increased substantially. For this thing to really work out if it doesn't then I think what that did the overall roundtable was concerned about. Is that there's too much enthusiasm. Already built in to our stock prices today. Or even during the of the US so far boo what about international well eaten there roundtable overall likes in DI and most of the panel likes Japan. The reason they like India is because it's a long term play based on their demographics. And improving fundamentals within the country you know it's. It's overall. Got some reform going on and unlike a lot of other countries India isn't intra woven march into the risks of the global economy. And and the reason for that is they've got reform is going on internally. And also a massive increase in their labor force both of those things should drive growth and that's very much counter to say circumstances and other countries where are. Maybe they depend on what happens with commodity prices and some other things and as a release to Japan. It also as I mentioned seems to be a consensus pick of the round table. Armed and Derek did the reason for that is there some encouraging fundamentals first of all it's engaged in quantitative easing and government is encouraging. The purchase of stock by investors. And the second thing is the weakening again. The weakening yen definitely supports. Other case further. For them to be able to export more and drive up their growth so I would say are not including Europe. Those are kind of the two high points that the the roundtable was more interested in looking favorably on right so that leaves Europe to have certain Barbara yes so you're. I agree with your assessment of Europe that they think are Europe offers value what is. More than likely ease value trap in other words an accident waiting to Al Horford and and the reason they're saying that is because the most important election is in France win Marine Le Pen but the first round happens in April on and if I'll look panned does win match. Then there would be a general election there's a probability. That she wouldn't carry the general election. Arm but if she were to. That could lead to dude did it frankly that the disintegration. Of the European Union has now that I not a good thing. Italy is also an Achilles heel off her Euro considering they're the boot that ranks and half. Are good points but money is already flooding out of bear and the banking system is sitting on a pretty good size crisis so. You know and Italy is the third biggest. Our economy in Europe it's not Greece you know win in very small proportion of GDP here. Italy counts and they also are likely gonna have a presidential election. In 2017. Back could be a problem and then Germany Germany the biggest beneficiary of the current structure. On since the introduction of the Euro but. It is also facing changes and are on hold Merkel who is to put our chancellor there are. Is facing kind of an uphill. You know situation as well with her own election this year and then finally breaks shore so far nothing's happened at practice talking about they've just barely talk in broader and they haven't even invoked. Essentially the article in the European contract to to say hey we're leaving when they do that they'll Libya who your time frame and it'll get serious as to what it means they're gonna have to negotiate new agreements between Britain and all you know the other countries in the European Union. That's when you're gonna finally see. Oh maybe there is going to be slowdown in growth in. Britain and in Europe so I think overall the concern is yeah Europe in some ways looks like a good value because things aren't as Tracy. As far as price earnings are ratios are concerned in Europe compared to say the US. But there's a reason for that and that's why people call it potentially a value trap because not only do it are they not as pricey today but they their price could actually get around more in the future reflecting even more risk in the future so anywhere. Information fall from Barron's roundtable and of course from you thank you very much for for sharing your inside pulse toll free number once again. EDD 89727526. That's eighty 8972. Plan. Or go online to plans strong dot com and cinnamon email but we'll see you next week have a terrific weekend disciplined strong financial form. This is tall Parsons president of planned strong investment management. And you're listening to the plan's strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what media take a look at your investments and retirement plan called my office. 80889727526. That's 888972. Plant. Securities and investment advisory services opportunity for me to prevent member Tim as I can sequester investment management is an affiliate of mismanagement grouping concluded that any Russian diplomats who threw six. And strong investment management is located 980 Washington street Dedham mass 02026. And can be reached at eighty to 89727526. 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