May 23rd, 2026 - It's IPO Time Again!

In a lively Saturday morning financial radio show, hosts Steve, Adam Van Wie, and Joey dive into the world of stock market updates and upcoming hot IPOs like SpaceX. They discuss investment trends, the influence of AI on markets, and address listener questions about retirement planning and the impact of inflation. The conversation weaves through light-hearted banter, timely warnings on scams, potential legislative changes, and intriguing economic insights, engaging listeners while encouraging financial awareness.

Transcript

Steve Van Wie 0:00

It's Saturday morning. It's 10 o'clock. This is the Van Wie Financial Hour. I'm Steve Van Wie.

Adam Van Wie 0:06

I'm Adam Van Wie.

Joey Loss 0:07

And I'm Joey Loss.

Steve Van Wie 0:08

And for those of you just tuning in, we did the previous hour. Angela Walker was not able to make it today and graciously offered us to take the hour if we wanted it. And we did. Been through quite a few topics and there's quite a few left. So I think you ought to stick around. Welcome back to all the regulars, of course, and the lines are open, 904-222-8255,

Steve Van Wie 0:34

and we'll put you to the head of the class if you decide to call. Got a trivia question that's left over from the first hour. It hasn't been guessed yet, and many, many other things. But as I announced an hour ago, I know a lot of people tune in just for this show, and we always started out with the market wrap. So we did one then, but we're going to redo it again for all the new people. So bear with us and we will try to make it fun because it was fun.

Adam Van Wie 1:04

Yeah, I'll do a little bit of an abbreviated version of the— this just because I did do this already. But the market started off in not a great mood at the beginning of the week, but it really turned around at the end of the week and it closed before Memorial Day weekend at all-time highs. The big news of the week, SpaceX IPO. It's ready for launch. And another company, OpenAI, is trying to go public by September. And we have a strong suspicion that Anthropic, another big AI company, won't be too far behind. If you're not familiar with those companies, SpaceX is Elon Musk's company that runs basically 3 product lines. First is Starlink. It's a satellite-based internet provider. The second is a service that launches satellites into orbit for other companies. And the third is X, which is formerly Twitter, and xAI. And one of the competitors, OpenAI, that's the company that you would probably know as ChatGPT. They were the first large language model that was made widely available to the public, and they really changed the world about 5 years ago, and the stock market as well. Actually, 4 years ago, 2022. So that's what really turned things around when everything in 2022 was going wrong. The release of ChatGPT kind of coincided with the market turnaround. Anthropic is a newer competitor to OpenAI that has grown about as fast as any company we've ever seen, and their Claude AI product, we use it and it's amazing.

Adam Van Wie 2:37

The SpaceX IPO will be pretty interesting. Elon Musk, he is, If you follow him, he has some other companies, including Tesla, and that stock trades at 13 times sales and 343 times earnings, which seems quite a high valuation. But for some reason, investors really give him a premium compared to most companies. There's, there's a lot of reasons for it, actually. But it also makes you wonder what the SpaceX IPO will do. There's no way to tell. But if Tesla's any guide, it could be the hottest IPO in quite some time. Reporting suggests that the IPO could place the market cap in the $2 trillion range, making it instantly one of the largest public companies in the world. However, at a $2 trillion valuation, the stock would trade at 128 times sales and 15,000 times EBIT. That's a bit hard to swallow, and I don't think I would be investing in that.

Steve Van Wie 3:36

Mm, a little rich for my blood too.

Adam Van Wie 3:38

Yeah. However, that company is going to end up in almost every index that you own. So if you own the Q's, if you own SPY, if you own VOO, it's going to end up in there at some point within about a year after going public. So you probably will own some whether you like it or not.

Steve Van Wie 3:59

It'll be very interesting to watch the price action from IPO day to index day. Yeah.

Joey Loss 4:04

Yeah. I mean, there's always a period that they call seasoning after an IPO, especially a popular IPO. I think the seasoning will be like probably the most wild we've ever seen. Probably. I mean, just in my, you know, 15 years paying attention, this is easily the hypest IPO I've ever seen.

Steve Van Wie 4:15

It could be.

Adam Van Wie 4:23

Yeah, I would agree. A lot of that has to do with we haven't seen a ton of really interesting IPOs in the last 10 years. Some, but not just not a ton. And this one just has all the ingredients for, for getting hyped.

Joey Loss 4:38

Yeah. As you say, this is— that's going to change. You're going to have a pretty crazy year for massive IPOs, it sounds like.

Adam Van Wie 4:44

Yeah, definitely.

Steve Van Wie 4:45

We need more public companies. The indices need to have things that they can buy. And out of those, it'd be nice if they had something they wanted to buy. Companies keep going private.

Adam Van Wie 4:54

Yeah.

Adam Van Wie 4:58

The people that are really into this stuff, the, the more informed investors, the one they're all asking about is Anthropic.

Joey Loss 5:07

Yeah, that, that's the one I'm most curious about.

Adam Van Wie 5:10

The growth rate on that company is, is very intriguing.

Joey Loss 5:13

Yeah, they basically made no money last year, and then in December they had a run rate of $9 billion. A year, and then I think it was by April it was $30 billion, and now it's rumored up to $50 billion. Yeah, I mean, that's, that's insane. They're basically growing 10x like multiple times a year.

Steve Van Wie 5:32

Kind of scary, isn't it?

Joey Loss 5:34

Yeah, if they continued it for 18 months, they'd be the biggest company in the history of humanity, and it wouldn't even be close.

Steve Van Wie 5:40

Well, you can bet on one thing, and pretty safely I think, is that won't happen.

Adam Van Wie 5:46

Yeah, no, that it'll slow. Anything that can change will, and this is no exception to that. Um, so, but it is pretty cool to watch, and we are very excited about those events coming up. The one I'm probably least excited about is OpenAI. I, I just think that they went there. To me, they're like the Yahoo of today. They had the first mover advantage, they were the front page of the internet, and where are they now? They're not.

Joey Loss 6:12

They're like the Empire of AI. Yeah, it's true. Anthropic's the Jedi now. They've got the tailwind.

Adam Van Wie 6:15

They're the evil. Yeah.

Adam Van Wie 6:19

Yep. So fun times coming up. It was a pretty good week of returns across the globe with the All-World Index up about 1.6%. And there weren't a whole lot of declines. Hong Kong and China posted very small losses, but European countries saw gains of over 3%. Many of them did. Korea was up over 3%. Taiwan was up over 2.7%. 7%, and Japan about 2.8%. So Asian returns pretty strong as well. Developed markets in general saw gains over 2% for the week, while emerging markets saw gains over 1%. One area that hasn't seen those recent gains is Latin America, with the ETF that covers that area down 9.8% since early April. However, the longer-term uptrend in that ETF is still in place, and it did go up 1.4% this week. Not saying it's a bottom, but it's an interesting chart. So check it out.

Steve Van Wie 7:13

At some point the bottom becomes real. Lower lows, higher highs.

Adam Van Wie 7:15

Yeah, it's true.

Adam Van Wie 7:19

You got to be higher lows and higher highs. Yeah.

Steve Van Wie 7:22

Yeah, yeah, that way. And we— what we've seen for the past year and a half or so is the recoveries on so many things are very steep.

Adam Van Wie 7:30

Very steep recently.

Steve Van Wie 7:31

Yeah, they call it the— in some cases the K-shaped recoveries. That's more of a an economic thing for the masses. But if you look back at a chart of what's happened this quarter, which is only one month and almost a second one, it's unbelievable the steepness of what happened between April and May.

Adam Van Wie 7:52

Quarter to date, the Dow is up 9.1%. The NASDAQ— the S&P up 14.5% and the NASDAQ up 22%. That's this quarter. That's this quarter.

Steve Van Wie 8:02

Quarter to date.

Joey Loss 8:03

After the tariff recovery felt very fast to me. That was 55 days to get to the premium that it got to shortly after that. 

Steve Van Wie 8:14

This one's been quicker than that.

Joey Loss 8:16

This one was 11. It's 5 times faster. And I thought they were kind of the same experience, but it really wasn't. I mean, that one took all summer.

Adam Van Wie 8:23

No. Yeah. It's crazy.

Steve Van Wie 8:27

It is. That old diversification and hang on thing is, I guess, more important than ever. 

Joey Loss 8:35

Yeah.

Steve Van Wie 8:36

And this is supposed to be the month we go away according to the old Wall Street lore. Not me. Thank you very much. 

Joey Loss 8:42

I'll be hanging out.

Steve Van Wie 8:43

Not last year either. It was pretty good. So don't believe everything that people tell you. That's rule number one. You're bound to be disappointed. All right. We got to take a quick break. Be right back and we'll redo the trivia question and get on with it. This is the Van Wie Financial Hour. Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Adam Van Wie 9:00

I'm Adam Van Wie.

Joey Loss 9:01

And I'm Joey Loss.

Steve Van Wie 9:02

Lines are open, 904-222-8255. The trivia question, which we did actually give out in the prior hour, but for all you new people, I wanna do it again. So this is sponsored as usual by Paul Lloyd at First Coast Alarm. Call Paul at 904-636-7888. Uber drivers, earn an average— they're 1099 types, not actual employees— they earn an average of $21.18 an hour. How much would their equivalent W-2 per hour income be, which really means simply if somebody else was paying the expenses, what would they be grossing from their jobs? It's lower than $22.18. Quick thing before we move along. Uh, there's a new scam for some people. I should have done this last hour because it's about real estate. If you are listing your home on Zillow or Craigslist, there's a scam out there now. They'll call the owner and ask if they accept Section 8 vouchers. If you say no, they threaten you with a housing discrimination lawsuit. In 19 states, refusing voucher holders can violate source of income rules, so the scam has enough legal perfume, they say, to stink up your afternoon. If that happens to you, it's a scam. Hang up, document it, and if you hear anything further, you'll be able to cover yourself because it's not true. And I think this was from Kim Commando, and she closed it out. I thought this was funny. Funny. Somewhere a loser is wearing pajamas, threatening litigation and calling it a real estate career. Pretty well put. Don't— oh, by the way, if you get an email from these people later and it's not from a legitimate source, don't do it. But also, if you get anything that looks funny, if it's from supposedly from Social Security or something like that, make sure it has a.gov on it. They're just inundating your mailboxes now from the sources that are made to look like that. It could come in like IRS.com or something like that. Watch for them. You know, it— that's not the way these things happen. Snail mail drives the government, not email, not telephones. So when you get your contact initiated by snail mail, you're more likely to have a legitimate thing. All right, Joey, you had something you wanted to discuss. Now's a good time.

Joey Loss 11:40

Yeah. So we, we've obviously touched on the unveiling of the Trump account many times, and as time goes on, uh, details get clearer. And now the website trumpaccounts.gov is open. I went there to set up a Trump account for my son John to get the— he was born in the window from January 1st, 2025 to the end of 2028. If a child is born during that period, they are able to receive the $1,000 gift into the account. So I went to the website to set it up, ready to spend 15 minutes on it, and by 90 seconds in, I was done. I mean, it's very well set up. Nice. Yeah. Very done. Very, very well done. It's literally just some basic information. If you have an ID.me account, you do have to use that. If you don't have one, you should probably set it up. It's a, It's a secure method the government set up to interact with the IRS and other tax forms on web pages. And anyhow, once I logged into that and filled out a couple checkboxes and basic information, put his birthdate, did an affidavit saying, yep, he was born then and that's his Social Security number, it's good to go.

Steve Van Wie 12:17

No kidding.

Steve Van Wie 12:46

That's what happens when you have a superstar Treasury Secretary.

Joey Loss 12:51

Yeah, it was very efficient. I mean, it didn't waste any time on anything that was irrelevant, which I was expecting to find plenty of irrelevance to wade through.

Steve Van Wie 12:58

We've all been trained very well. Hold your nose and deal with the government and we'll see what happens, right?

Joey Loss 13:05

Yeah. And the other notes to share on it logistically, once you do that, it goes into processing. At some point, the first stage of those accounts will be at a central Treasury-run

Joey Loss 13:17

custodian of sorts. That's where the money will be deposited, that $1,000. At some point in the future, there will come a time where you can do trustee to trustee rollovers to your favorite custodian— Schwab, Charles, uh, Fidelity, and so on. But the accounts will be born, so to speak, at the central government.

Steve Van Wie 13:36

I heard Robinhood has taken on a big contract to help them with the processing too. That, that company got off to a start that kind of made me nervous, but they seem to be doing okay.

Adam Van Wie 13:48

Oh yeah, they're, they're big, especially with the younger generation.

Steve Van Wie 13:52

Mm-hmm. And my concern with them was that they were enticing people to do things that were inherently too risky for their age group and their knowledge and experience.

Adam Van Wie 14:02

Well, there's a big debate around where should your custodian draw the line? Should your custodian allow prediction market betting? Should it allow crypto? It's— I mean, I think there's legitimate arguments on both sides of that, though.

Steve Van Wie 14:17

What do you guys feel about the prediction accounts? Gambling or no? Should be legal. Shouldn't be legal.

Adam Van Wie 14:24

I think it should be legal, but I do think it's gambling.

Steve Van Wie 14:27

Okay.

Joey Loss 14:28

Yeah, I think that's probably where I land. I, I don't know enough about the security of like what it takes to create an account. I've heard some horror stories of people's kids getting involved and making a mess. I just, I hope that they're really validating people's Social Security numbers, making sure people are the right age to make those decisions. But other than that, I think you kind of have to let markets be.

Steve Van Wie 14:50

You think, Adam, do you think there should be general access or accredited investors only or anything like that?

Adam Van Wie 14:57

I don't think you should need to be accredited. That seems like a really— Yeah, I do think that. I mean, if you— anyone can go to a casino over a certain age. So I don't think it's— I mean, I think you actually probably have better odds in the prediction markets because at least it uses some brainpower like rather than pulling an arm on a slot machine.

Steve Van Wie 15:00

That's a high bar.

Joey Loss 15:18

Yeah. And I don't think you should be able to fund it with credit cards. I think that should be a rule. Because right now you absolutely can.

Adam Van Wie 15:26

Yeah, that seems like a good rule.

Steve Van Wie 15:29

Okay, well, while we're discussing, how about this one? There's a bill in Congress now to allow charitable contributions,

Steve Van Wie 15:41

direct— what am I trying— QCDs? Qualified charitable deductions, meaning giving money to charities from your IRA. There's a bill in Congress that would extend it to 401s. What do you think?

Adam Van Wie 15:53

Yeah, I mean, why not?

Steve Van Wie 15:54

All right, let's say you're part of an IRA, or a 401, I mean, and they add this provision, but you don't use it, which means there's a lot more overhead on your 401. Potential problem?

Adam Van Wie 16:11

Um, I don't think that it's— it's really just a check sending feature. I mean, I don't think it's that much process and forms and all that.

Joey Loss 16:21

I mean, ideally they would just charge like $10 per transaction to do it or something that, that keeps the cost with the people participating, because the benefit to them if they're choosing to do that is going to be far greater than $10 in theory, right? Right. So wouldn't they be happy to?

Adam Van Wie 16:35

Yeah. Also, the amount of people over 70 and a half that still have 401s is pretty small.

Joey Loss 16:41

Right.

Steve Van Wie 16:42

That was probably the biggest point. And I read a kind of lengthy dissertation on it, and I was kind of leaning toward don't do it. And part of it's personal. You know, what do we do? We take a lot of 401s and roll them over into IRAs, and it's perfectly legal after that rollover is done. So it it has a potential to diminish our assets or whatever or not, but that's not my number one concern. Number one concern is also always for the client or the employee with the account. And if they would benefit and it isn't too expensive, I would caution them though, I would not demand that they do it. If they pass the law, I would make it available. And then the employer and the employees can battle it out.

Joey Loss 17:30

Oh, you mean at the plan level they can decide? 

Steve Van Wie 17:31

At the plan level, yeah.

Joey Loss 17:32

Sure. Yeah. I mean, there's— that's kind of how like true-up provisions and some of these other things work. There's a lot of— Yeah.

Steve Van Wie 17:39

Just because something is allowed, should it be done? Not necessarily. But I thought it was kind of an interesting thought. And this, the act, if anybody wants to follow it, I kind of like it. It's called the Charity Parity Act. Cool, huh? All right, I know your feelings on that one. Let's talk about Jeff Bezos. He believes that half of American workers should pay no income taxes.

Adam Van Wie 18:08

I thought that was already the case.

Steve Van Wie 18:11

No, you're way off. Okay, 3% they pay. The lower half pays 3%. That's not good enough for Jeff. He thinks it ought to be zero. And he gave an example, and I decided I was going to, of course, have to nitpick it a little bit. Not that I don't like him or anything. He's actually becoming a more interesting person all the time. He says, why is a nurse in Queens who makes $75,000 a year paying more than $1,000 a month in in taxes. That's $1,000 a month that could help with rent or groceries or anything like that. So I looked at it. I said, you know, excuse me, seems like a lot of money to me. So I looked up, did some numbers. If you have a gross income in Queens of $75,000, you get a standard deduction, assuming you're single, of $16,001. So after that, your taxable income, assuming all else being equal, $58,900. Then I went to the tax tables and the 10% up to $12,400, 12% to $50,000, which is over what the taxable income was. So I worked that out and find out her tax would be more like $5,500. $1,000 a year, not $1,000 a month. So it makes me wonder.

Adam Van Wie 19:44

She lives in New York though, so there might be some state tax.

Steve Van Wie 19:48

I didn't even count that, you're right. And I wonder if that's what he meant, that the state tax would be as much as the federal tax, or is he counting the self-employment income as tax? That I don't know. People who write these articles and people who get quoted, they're not always thorough enough that you can make a good argument. But as Adam said, when I first brought it up, I thought they didn't pay any anyway. I'm not worried about the lower half of the country paying 3% of all income taxes. I like having a little skin in the game, as Joe Biden would say.

Joey Loss 20:26

Well, the cynic in me when it comes to Jeff Bezos talking about that is where's that money going to end up getting spent? That 3%, I bet 100% of it goes to things like Amazon.

Steve Van Wie 20:37

Huh.

Adam Van Wie 20:38

Maybe.

Joey Loss 20:38

Right? I mean, what was it going to go into?

Steve Van Wie 20:40

You know, it's your marginal income, which is your expendable cash. So maybe he's even smarter than I think he is. We'll be right back. Don't go anywhere. This is the Van Wie Financial Hour. Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Adam Van Wie 20:54

I'm Adam Van Wie.

Joey Loss 20:55

And I'm Joey Loss.

Steve Van Wie 20:56

And lines are open, 904-222-8255. Trivia question's still out there. What would be the equivalent pay for an Uber driver if he was now making $21.18 an hour as a self-employed person? What would it be if he turned into a W-2 employee per hour?

Joey Loss 21:16

This is really an algebra question. I hope, I hope people aren't too intimidated.

Steve Van Wie 21:20

Somebody, somebody could do that in their head if they were young. Yeah, I used to do things like that in my head, but I was young. I don't do that anymore, man.

Adam Van Wie 21:29

I've never been good at that. It's not my thing. So there was a new retirement survey put out this— came out this week, I believe, and had some really interesting data in it. I just wanted to touch on a few things. One of the questions was how comfortable you are in retirement, and only 5% of retirees say they are living the dream, which that seems like a pretty high bar. So I think 5% is— not inappropriate. 37% say they're comfortable. 39% say they are not great but not bad. 16% are struggling, but just 3% are living the nightmare. The, you know, honestly, those results may be a little bit better than what I would've expected.

Steve Van Wie 22:19

Oh yeah, me too.

Joey Loss 22:20

That's actually very impressive considering it's somewhere between 14% and 30% of people live on Social Security alone.

Adam Van Wie 22:25

Yeah. But I know some people who do that and they're comfortable, but they just design their life differently than people who have a bunch of assets. It can be done. Yeah.

Joey Loss 22:34

Yep. It's interesting.

Steve Van Wie 22:36

Makes you wonder if they always lived that way though, because they don't have anything else.

Adam Van Wie 22:41

Well, that is usually the key to a happy life is living, not outspending your income. And so I bet that they were used to a lower income lifestyle prior to retirement. I think it would be— I think you'd have a lot more in that bottom category if people were living one way and then they retired and had to greatly downgrade their lifestyle.

Steve Van Wie 23:02

I could see why. I can't think of anybody who would enjoy that process.

Adam Van Wie 23:05

The things that, that people worry about the most, the number one thing was inflation lessening the value of assets at 92%. I find that very not surprising considering what has just happened in the world in the last 5 years because, yeah, There is a recency bias there. We just saw a period of very high inflation. I think that's just top of mind for everybody.

Steve Van Wie 23:28

Of course.

Adam Van Wie 23:29

The second is higher than expected healthcare costs. That is also not surprising considering the last 20 years healthcare costs have ballooned like crazy.

Steve Van Wie 23:37

Yep.

Adam Van Wie 23:39

The third one is a major market downturn significantly reducing assets. I think that's always going to be a concern in retirement and it's a valid one. Hopefully you have a good financial advisor who can help you navigate what, what would happen if that were to happen. Number 4 was not knowing how to, how to best generate income and/or draw down assets. Another area that a financial advisor could really help you with. And the last one is outliving your assets. Again, a good plan would mitigate that. That being said, only So that being said, 64% of retirees do not work with a professional financial advisor, and it's not for everyone, but that seems like a fairly high number to me.

Steve Van Wie 24:24

Mm-hmm.

Adam Van Wie 24:25

I agree. Yeah. And 44% don't have a plan in place for estimating expenses, determining how much income is needed, and developing an investment strategy to meet their goals. That's not a good thing.

Joey Loss 24:26

Yeah.

Steve Van Wie 24:38

That is not a good thing. No, that was the right time to hire an advisor. That's the question everybody always asks. And I think the answer that we would give would surprise a lot of people.

Adam Van Wie 24:49

I think it depends on the people. I really do. I think for a lot of people, it's, it's somewhere in the neighborhood of retirement, but a lot of people could really benefit much earlier than that as well. Um, it just depends.

Joey Loss 25:04

Yeah, I think there's different levers. Some people do an excellent job of DIY all the way through accumulation and an advisor would be helpful. Oh, looks like we got a caller.

Steve Van Wie 25:17

Good morning, Greg.

Greg 25:18

Good morning. Well, it's Saturday. It's the Van Wies and I'm at Costco. All right.

Steve Van Wie 25:25

Love it.

Joey Loss 25:26

Happy Memorial Day.

Adam Van Wie 25:27

Doing your part to stimulate the economy.

Greg 25:31

Yeah, well, um, Memorial Day is a day of memory, so I, I kind of remember the stories that my dad told me. Uh, you know, he was in World War II, and, and so, um, I think of it differently. Um, and I have a nephew right now that just, uh, um, retired from the military. He's quite a story of his career. Um, and, uh, and like a lot of veterans out there, or many of them anyways, um, he's having some real difficult times with PTSD, and I'm really concerned for him. But, um, that aside, I called because, um, you know, you know, we're all— I think a lot of people are fascinated by AI. And, um, and I was listening to Adam and he was talking about how he uses it for— I think you use Claude, right?

Adam Van Wie 26:32

Um, yeah, that's one of the systems that we use.

Greg 26:35

Yeah. So, so, um, and I, I use, I use Claude a lot. I, I mentioned that in a previous call, and I also integrate that with, with, uh, ChatGPT, and it's amazing how you know, you can use one to, to bridge the other and, and help, you know, use competing, uh, AIs to get a deeper and more, um, I guess you would call it more along the line of a DeepSeq result. But, um, yeah, I was just curious if you were doing anything like that and, and, uh, and, you know, how do you use your AI in your business?

Adam Van Wie 27:17

Yeah, I'll let Joey take that one. He's been the point man on that.

Joey Loss 27:21

Yeah. Um, well, we, we've definitely bounced around between the major players, uh, and we probably won't stop doing that. I think they're all progressing so quickly and different ones taking the lead at different times that it's worth, you know, if your use case is important enough to, to continue to be looking at who is playing the game the best at any given time. But as far as how we use it in the business, Um, we've started developing skills for certain things. Um, and by skills, I mean in Claude, you can actually create a whole system of how it's gonna process information, um, that you've taught it. And you just hit like backslash, you type the name of the skill, and then you give it like 1 or 2 sentences of context. Maybe you upload a few documents, but it runs through this whole system that you've created of how to handle that information. We've started to do more of that. Of course, we have to be careful because we never use client information within Claude, but there's plenty of other things that we can do that help us with research or other things that are more agnostic in nature that we've gotten a lot faster and deeper with because of skills that we use in Claude and other tools.

Greg 28:30

Wow. Okay. That's kind of fascinating. I mean, I, I I mentioned previously I'm building something out, and, um, you know, I, I actually have a, an app that's in beta form right now. It's live, and, uh, um, and been working through that. And interesting enough, um, you know, when you're— when you go live with a beta model, that's when you begin to see where all the, the warts are. So, um, you You know, now you're stress testing it. And so now I'm back to the drawing board, not to tear it back all the way down, but to just make it better than, you know, where it's sitting right now in the way it's performing right now. So this weekend is a good weekend for me to continue to do that. But, you know, talking about these large AI companies, It's, it's really mind-boggling to, to try to wrap your mind around where this is ultimately going to go. I mean, it's just, it's like a whole new frontier, and it's just, it's just, for me, it's amazing. I don't know how you guys are looking at it, but it's just, it's a wild, wild rodeo right now.

Steve Van Wie 29:54

Yeah, I'm I'm on simple things, you know, I'll ask it a straight up question. I haven't really been letting it think for me yet, but you know, I'm, I'm so old now that I just don't, don't see that there's that much interest in me getting really good at it. So he says, well, I had a couple of friends here who are very good at it.

Joey Loss 30:16

Well, that's exciting about your app.

Greg 30:18

Um, yeah. And there's, well, I, I will, uh, You know, I will share that here. Hopefully I'm attempting to go live on June 5th. Um, and the reason for that is, is because one, it needs to go live and two, it happens to be our wedding anniversary. So I thought what better day than that to go live, especially since we've been married for almost 30 years. So, well, that's awesome. Yeah, thanks. But, uh, but I'm old too, so, um, but I, I, I see the opportunity and I'm like, man, if you don't jump on this now, um, you know, there may not be another chance at my age anyways. That the younger kids, they, you know, they've got more time.

Adam Van Wie 30:46

Congrats.

Steve Van Wie 31:08

Yeah, I don't disagree with any of that. And, you know, the nature of AI is that you train it and it trains it. So I don't know where you could possibly get a good concept of where it's going because the future is totally uncertain the way I see it.

Greg 31:26

Yeah.

Joey Loss 31:28

I think it's just going to allow us to solve bigger problems. I mean, 30 years ago in business school, you learned how to calculate EBITDA. Now everybody who goes into their first job has a system that gives them EBITDA immediately. So what do you do with that? And you're answering these layers of bigger and bigger questions. I just think— That's the direction it's going if we can all keep up.

Steve Van Wie 31:47

Yeah, and I think two things can exist all at once. I think it can be scary and exciting at the same time.

Adam Van Wie 31:53

Oh, for sure. Every new technology is like that. I mean, from the internet to— I remember I tried to explain the internet to my grandmother when it first came out. She wanted nothing to do with it. No.

Steve Van Wie 32:05

Wasn't long she was using it.

Adam Van Wie 32:06

Yeah, and emailing and—

Steve Van Wie 32:08

Greg, did you want to take a quick shot at the trivia while you're here?

Greg 32:12

Sure. I'm just— I don't even know the answer, but I'm going to say 21. How about 17?

Adam Van Wie 32:22

Too high.

Greg 32:23

Okay. We got a bracket. All right.

Adam Van Wie 32:26

Thanks for the call.

Steve Van Wie 32:27

Appreciate the call. Tell my friends at Costco we said hello.

Steve Van Wie 32:34

You're laughing. We're on a first name basis with everybody.

Adam Van Wie 32:38

They really are. It's true.

Steve Van Wie 32:40

All right, we're going to take one more quick break. We'll be right back. Don't go anywhere. This is the Van Wee Financial Hour. Welcome back to the Van Wee Financial Hour. I'm Steve Van Wee.

Adam Van Wie 32:48

I'm Adam Van Wee.

Joey Loss 32:49

And I'm Joey Loss.

Steve Van Wie 32:51

Lines are open, 904-222-8255. And trivia questions there. It is, what would be the W-2 hourly wage for an Uber driver who has a 2018 Uber 1099 self-employed hour and $17— what was the exact number Greg gave? I didn't write it down. $17.61 or something. It's under $17. I'll give you that much. Okay. Um, another discussion. This one caught my eye this morning and I couldn't resist. Goodbye, Chair Powell. Good riddance or good job. Comments?

Adam Van Wie 33:33

Um, I mean, so you can make this argument a lot of different ways, but if you solely look at market performance under him, it's pretty good.

Steve Van Wie 33:44

We spent a lot of years— I don't know if the word is praising him, or at least giving him a very solid comparison to his predecessors. I, I've, up until a year ago or two, maybe a year ago, Probably. I thought— he's been the best one in my lifetime, at least my lifetime of following finance. I don't know about Volcker, people like that, so long ago. But what happened with him, it looks like a personal thing. And I don't know if he changed or what, but the numbers support your theory pretty well. The S&P doubled. More than doubled from under 3,000 to over 7,000.

Steve Van Wie 34:30

Point-to-point gains have been strong, but it's very high volatility, which is one thing we've noticed.

Adam Van Wie 34:37

Uh, are you like relative to history going?

Steve Van Wie 34:41

Yeah, well, going, yeah, from 3,000 to 7,000, it wasn't a straight line, but it never is.

Adam Van Wie 34:45

Yeah, I don't know that it was high volatility compared to all market conditions historically though.

Steve Van Wie 34:50

I'm not sure. It just called it a pretty volatile ride, but it didn't really make a comparison. 

Adam Van Wie 34:57

Yeah, I don't—

Steve Van Wie 34:58

You could do that. You could have AI do that. See what the correlation coefficient is.

Adam Van Wie 35:00

Yeah.

Adam Van Wie 35:02

I don't feel like it was that bad. We had one bad year and a couple of V-shaped drops.

Steve Van Wie 35:06

We had two bear markets on the S&P 500 and two near-bear markets. 

Adam Van Wie 35:11

Yeah.

Steve Van Wie 35:13

And what I wrote in here for my comment which actually stops short of the current problems because, you know, he's doing the renovation. That's a problem. He and Trump are at odds. That's a problem. And so on. But what I wrote in here, I think, is the most important thing about the whole thing. COVID happened on his watch. He didn't cause it. It happened. And if you want to see the volatility charts Look at the COVID year.

Adam Van Wie 35:44

Yeah, I almost think you have to throw that one out though. Just to be fair, like, there's nothing that anyone else could have done during that time to make that less volatile.

Steve Van Wie 35:47

I do too.

Joey Loss 35:55

Yeah. And he did. I mean, I don't know. I feel like he handled it pretty darn well considering how much we were printing money through policy at that point. I mean, like legislative policy.

Adam Van Wie 36:03

Yeah, that wasn't Fed policy and it wasn't— it wasn't even the early printing that really concerned anyone. It was the printing that was done 2 years after COVID. I mean, it's just ridiculous.

Joey Loss 36:13

Yeah, February of '22.

Steve Van Wie 36:16

Yeah, agreed. Well, this one, this article was a— it was from mail.google.com, so I don't know who wrote it. But anyway, I love their last comment: President Trump is almost certainly thinking good riddance today, but from a strict stock market perspective, it doesn't get much better. Or as the president or the new Fed chair would say, at least not yet.

Adam Van Wie 36:42

Yeah, we'll see. Yeah, I again don't envy anyone who has that job. It's impossible.

Joey Loss 36:50

I think it's a tough job and Warsh is coming in at a tough time because obviously, I mean, if you watched the mantle handoff, it was the torch handoff, I guess a better way to say it. Trump was like, he encouraged him to act independently, but then also pretty clearly expressed that he's hoping he makes the right choices. And, uh, the implication being take rates down. Or actually, he said it as, let the economy's booming, let the economy boom, everybody wants a boom, like that kind of language. And, um, you know, that implies don't touch the rates or bring them down. Uh, but Warsh is in an environment where you— there's really not a monetary numerical argument to lower them right now.

Adam Van Wie 37:28

Not today, no. But that could change quickly.

Joey Loss 37:30

That could change quickly.

Steve Van Wie 37:32

I've been reading a lot about some new studies on inflation. And it's very interesting. A lot of people believe that the— this moment we're in now where AI and companies like NVIDIA and so on are expanding so fast and there's so much money out there that it's going to automatically drive inflation. So these people went into the history books and they looked at some of these times where the economy was growing as fast as it is now and money was flowing. And they said it's inevitable that as the business cycle changes around, you're going to see all of this stuff become hyperinflationary, things like that, which is a lot of the older thinking, I believe, like Powell's. And they found that using an honest-to-goodness real analysis, it's just— it's not true because what happens was the economy grows now with all the investment we're having. And after that, when people start populating these factories and selling more and the volumes go up and everything, it proves not to be inflationary because you can handle the productivity so much easier. And I kind of agree with that. So it's going to be interesting.

Steve Van Wie 38:51

Good morning, Craig.

Craig 38:53

Hey, good morning, gentlemen. Got to take a stab at the trivia question. 

Steve Van Wie 38:57

Absolutely.

Craig 38:58

All right, I'm gonna say 1622.

Steve Van Wie 39:03

And that is also too high.

Craig 39:06

Too high?

Steve Van Wie 39:07

Yep. I'll explain it all pretty soon. It's some things people might not think about. All right, appreciate it. No, what?

Speaker 3 39:13

Wait a minute, what? How about another? Can I take another stab?

Steve Van Wie 39:18

Oh, you can, but if you win, I won't give you the prize.

Adam Van Wie 39:21

So harsh.

Craig 39:22

14 1468.

Steve Van Wie 39:25

Too high.

Craig 39:27

Oh my goodness. All right, guys, appreciate it. 

Steve Van Wie 39:30

Have a good weekend. Long one. Yeah, um, some considerations in here that might have to think about. And I, I have to say that the answer was very thorough. This was well researched. So when I, when I tell you, you'll see. All right, um, Steve, I want to comment on your point.

Joey Loss 39:50

Because I agree with you that I don't think this has to be like others. Uh, it may be, but I don't think it would be. And a big part of the reasoning for that, uh, is the source of the money. In the past, it's when banks are funding through loans a lot of what's driving expansion, then you end up with this like brick wall moment where things cool off really hard. And, uh, all that excess money without excess value on the other side of the equation Creates inflation because you just have all this extra liquidity in the market and it really hasn't been a commensurate creation of value on the other side to offset that. When you have companies spending their own profit to create new opportunities for profit, that's a very different situation. Could it end in a similar scenario? Sure. But I just don't think by nature it's gonna be nearly as extreme if we do see it because of where that money's coming from.

Adam Van Wie 40:39

I agree. And the biggest question that investors had this week for Nvidia, who just reported their record earnings again was what are they going to do with all their cash? It's like the money is not coming from the same places as it was back then.

Steve Van Wie 40:55

Yeah, factory construction is at an all-time high and production rates are going up and up and up. And all that means is there's going to be better and better productivity, which is the antidote to inflation. But they also said something in this article that I've never thought of, never heard of. And I've always been kind of a naysayer on it. The PCE, the Personal Consumption Expenditure Index that the Fed likes to use, doesn't include things like factories and buildouts and all that stuff. It, it's based on, as it sounds, consumer spending. Well, we're not buying Nvidia, we're not buying chips, we're not building machines and that kind of thing. We're living our normal lives. And the conclusion they drew, and it seems that the new Fed chair is kind of going along with this, is that don't worry about that part of the economy with your interest rate policy because that's not going to affect it. And I thought, you know, that actually makes some sense to me. And I don't know exactly if it's going to work that way, but they came up with some historical numbers that would verify what they said. So that according to them, the dumbest thing that they could do would be raise rates and pinch off what's about to happen in the economy. That's all the economy is preparing for this boom time, and you don't want to stop it. I don't know. Will it happen?

Joey Loss 42:29

I agree with the first part. I don't know enough to have an opinion on the second, but I think the first part I agree with because Um, just, I agree with it, but I, I, I'm concerned that it doesn't really matter what the Fed does because what has happened over the last 2 years, I think we talked about this on the podcast recently, was that the equity premium has gotten so high because of these corporate profits growing at 14, 15% a year that that good news can actually drive up the 10-year and long bonds. Because they're all competing for the same investor dollars. So if, if the Treasury wants people to buy those bonds, they now have to offer more because equities are so hot. And that's interesting because it's typically bad news and perceptions of risk that drive those rates up. What the Fed does on the short end, it almost doesn't matter with regards to those rates. And those rates are more related to what those corporations are going to pay if they end up borrowing money to do the buildout you're talking about.

Steve Van Wie 43:26

Yeah, this is kind of a a complicated situation for anybody. And I don't, you know, if I were in Kevin's shoes, I'd be stepping into this hornet's nest. I think I, I don't envy the guy at all. It's a good thing he's rich.

Joey Loss 43:40

Yeah, I think, but I think you're right. He just has to listen to the consumer's life, which is separate from all this build-out.

Adam Van Wie 43:46

Yeah.

Steve Van Wie 43:46

All right, $21.18 an hour, subtract maintenance, insurance, depreciation, and self-employment taxes. Remember, that's big one, 15.3. What's the W-2 equivalent? $9.21 an hour. So when people start telling you, oh, you should drive an Uber, you make $20 an hour, just remember it's closer to $9.

Joey Loss 44:10

And that's got to be after expenses. And that is, that's a big part of it then.

Steve Van Wie 44:16

And the only difference is you don't get to write off as many fun things as people do when they're self-employed.

Steve Van Wie 44:22

And you all know what I mean. So that was it. All right, we have had a wonderful day and we're gonna have a wonderful weekend. Um, think about those that lost their lives, and we'll see you next week.