Planstrong Financial Forum 11-19-16
Nov 19, 2016|
"Smart investing, simplified"
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
They both play and stroller and broadcast studios he would still play and strong environmental forum will be your host. Jim Karr murdered bamboo president Clinton's strong investment. Full portions there's still I'm Bruce Morton investing. Symbian phone. And I'm Ken carver at the anchor desk along with Paul Parsons the supplies strong financial forum and we are here we've. Another week to mull over what's happening in what has happened and Paul it's your first time back carry you for sensors little vacation yeah you know the last time it took a vacation was the week out the breaks that it's really amazing you you do your time your vacations well go to you know what I did on election night now this is true story and I didn't watch the election really I watched the hallmark Christmas. And I want to bet. And I did it because I just you know no matter what they said I knew it was gonna be inaccurate. Right so I thought why waste your time you can at least feel good and watcher you know a lot of holiday movie and feel good about that slight dip that. Was excellent with us all by myself unfortunate my wife was on the other coast but I was. On the air and just sitting in my living room and just enjoying ad and feeling good and I want right up to bad I didn't turn on the news and went right to sleep. And I got up the next morning and I almost fell over II Korea we guy I wish you know I just didn't believe. That Donald Trump had won and who or frankly even almost as important. The Republicans had kept the San grey hound because both of those things were incredibly. Important to kind of we're the country was going in the future both with the you know the senate obviously as it relates to the Supreme Court. I and weaned we thought debt I'm you know the highly. Problem improbable circumstance was gonna be divided government that aren't that under almost any circumstance the Republicans were to keep. Other house but there at the senate looked very much in play not and Hillary Clinton most of they were going in that night job right you're 23% and and certainly elect oral looked she looked like she had it wrapped up. The Saturday before the election that you've said pretty much that but you also set. I won't play it but you also said however. There is a small chance we do see a small chance that with the trump of victory that will mean he's bringing out. He is grassroots supporters which could carry. Both the senate and congress and you did say he didn't throw that in their say we have to consider that responsibility said. I'm not betting on that you do news we're betting our weren't you know read would you say that's certainly a possibility is something we should be aware of and as I saw that happening on election nights in this. One of the Apollo starting its if it is true Kazaa I thought under no circumstance. Who could that I could imagine would. They'd be three d.s you know the democratic president democratic senate democratic house but if if trump did win. And then could he have dragged along. The senate with Pam and and it appears that is the case and so it all I don't you know frankly I'm an investment manager Brent. As an investment manager I just see this as incredibly good nose. And I see this good news because in this it's at the lakers and desist nothing to do with politics us has nothing to do what I think of Donald Trump as a person or a candidate or. Hillary Clinton as a person or candidate actually nothing to do that. Here's the difference. I look at eight trump administration as one especially with the senate and house of the same party. Where he's actually going to be able to get stuff done and the stuff that he wants to do. Arm is. Number one right upper fraud is she wants to cut taxes and I have to tell you the last time we cut taxes meaningfully. In the United States was under Reagan in 1981. And then again in 1986. And if you look at what happened to GDP growth in those two circumstances. After we cut taxes it was fantastic. And it was. And average our GDP growth of you know 4% plots real GDP growth we're nor Maryland now not even close and so I look at that and you the other thing that trump has talked about doing is is getting written you know big rolling back a much regulations and some other stuff again. I'm not getting into whether or not these regulations were well intended. Or that date they don't satisfy are a number of valid purpose that has nothing to do with what I'm getting at here. I'm looking at is surely through the lens of investment management. Let me just remind listeners that. This is obviously a time of Cheney jets and debt means it's an excellent time. For folks to call your office to have a professional manager look at your portfolio. Are you ready as your portfolio ready. For the trump presidency. Also for numbers eighty 89727526. That's EDD 8972. Plan or go online to plant strong dot comments that follow. And the in his second opinion take a look at this are we ready for what's to come. And I I have to tell you caddie. Arm you what you say is completely accurate I can't think of a seat change. That could happen more than what's just occurred a week ago and if you think calmed me you know blowing smoke here to speak of at the sway that ten year US treasury. Was trading at around one point 7%. Yields. The night before the election is now trading at 2.2 percent and it doesn't sound like a lot doesn't. It's Hugh. And if you think about it another way think of it this way. Electric utility stocks which people by primarily just to have a safe dividend they're not looking for price appreciation. For a 45%. Dividend yield and walk away and don't be bother him. They lost six or 7% of their value last week. Mark okay so you might say oh while mom really saved from a stuff that won't get impacted no matter what happens out there. That's just inaccurate and and and this kind of wholesale change really does we need. Two significant. Changes in your investment portfolio performance and component summit and that's what we spend so much time. Getting ready for being ready for and frankly are our portfolios were very well positioned. For ultimately what happened here. Per hour once again postal for number 8889727526. But let's start off with some of the business and news stories of the week what we've seen over this last week. Before we get into mourned deeply into the election. So let's start with the US stock market in the US stock market is. Essentially at an all time high now okay that the Dow was at eighteen eatery teen nine. And and the Dow Jones Industrial Average is just an average of thirty of the largest kind of most established. Companies in the United States their publicly traded armed and and so that's an all time high that's certainly were flax. A confidence. In the fact that there could be more economic expansion and what had been baked into the market up to that point. And and the markets were up 12%. On of the trump presidency I'm actually more than that on trump presidency news. But this past week they were essentially flat to up just a little. And international markets were essentially flat this week as were European stock OK so we got a really good bump last week. When it did but the trump presidency occurred and people started to digest it and I would say the exact same thing happened on the bond market the bond market took a big hit. Last week. When all of a sudden you know what people that did do this for work started to digest was the fact that trump has talked a lot. A bottle. On infrastructure projects and reducing taxes and stimulating the economy all three of those things. Really took into a couple things and but inflation is way up at the top of the list that come with something that this is the first time Kenny that he when I've talked about inflation for year -- right. Because if anything the Fed has been trying to find a way to generate some inflation greater than the 2% target that we've seen out there. And by the way the Fed has also been interest in seeing GDP growth in excess of two for two and a half percent all of a sudden we're talking about that is not amazing. When you know you get a guy who starts to talk about tax breaks. And end at the same time you know I I read editorials like guy Alan blender Hu was a Princeton economist who was the vice chair of the Fed awhile ago and the first thing that guy did was take a shot at trump and say. Hey you know what the first thing the Republicans do is they talk about cutting taxes for people let that I don't need a real tax cut. Knicks is wait a minute. No those are the people are paying the most in taxes. And there's a benefit to and each you know I'm a fact guy go back and look at graphs and charts. The answer is she very simple that the simplest one you could look at whether it's after. Or a president Kennedy. Was assassinated Johnson took over and they implemented Kennedy's tax cuts you saw great growth in the economy then you fast forward to. A 19811982. One and Reagan did his first tax cut do you go fast four to 1986 when he did a second tax cut. And you look at what kind of GDP growth we had and it was really quite something and I have to Italian. Anybody complaining about deficits. Have been. They'd had to carry a lot more weight with me if they hadn't been so incredibly. Quiet over the last EE yours. When we have. Doubled the amount of debt that this country has taken on we went from zero to ten trillion dollars of debt in the first 240. Years of this country's existence we went. For the next ten trillion dollars in debt in eight year which are okay and he can't blame it all and Obama a lot of it had to do would digging out from from mom than the financial crisis and a bunch other stuff. But my point is this hey if you wanna be a critic. Of incurring debt then where you've been the last eight years and all of a sudden 'cause it and now you are all it does is reeked of political posturing rather than what's actually good for economic growth I would argue. But a lot of what's gonna happen is gonna lead to good economic growth and I'm so excited for my investors because. We actually have terrific opportunities now to be able to try to generate better returns for our clients and they'll be on encumbered by ways that frankly the government Scott and the way until my. All we come back we'll talk about the dollar will talk about or will talk about what's happening overseas. After the election as well that's what we return it's flat strong financial form. This is all Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what need to take a look at your investments and retirement plan called my office of 80889727526. That's 888972. Plants and. Hi this is Avi Nelson. Others buy insurance for 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. You should have a fiduciary obligation to act in your best interest. And be paid the same amount no matter watcher invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment. That's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial group linked member tumor SIPC plans to investment management is not an affiliate of next mention grouping and is located and I need to Washington street denim. OK. Okay. But the good news. OK okay. It's. It's. Crumbled and strong broadcast studios of the epicenter of capitalism this is no plans strong on national forum where all portions president of planned stronger investment management. Yeah and then Ken carver at the anchor desk along with the ball Parsons it's a blast struck financial form and he'll listen to this music we puritan in a car. All the time that's true but it's the boom. But if you loosened latest version of the current habit orchestra playing are trying to make you love skill at this early hour and a cooler yeah. I play with a little bit. Wow who knew that The Who went upscale and Gerry upscale yet again or while you hit yeah a lot of sales he at a certain age you're suddenly a skilled assassin inning you know you and I are old enough to remember. Yes we are we are it's very much I very much earlier old that I'd have to remember when they started. So I would tell you a funny story so you remember Louis Armstrong song it's a wonder for sure. And Jimmer when Mac came out I Kilmer was in like ten years ago they they did an updated updated version Comerica 1015 years ago came out it was funny because this is back when people still called on the radio programs of requests whatever they wanted to hear. Our young people causing hey Al I wanna hear that new song by that guy Armstrong. And you know I laughed because it is it is sold telling but I mean you know one that something's timeless slight that it's truly timeless and wonderful. Well let's assume we are let's we're not a tie which is one thing is that I love that. Salt exit when we're talking during the break about the fact that. You were quite excited in this first segment and you're target but you're excited for you were investors. And it is the first time in a long line no I'm for just say that quite frankly. What you think about were finally lining up some stuff and and I just can't emphasize this enough please don't think this is political commentary it is not this is economic comment. On this is the first time in quite some time Ken. Where the economies in relatively good shape and now it's kind of like owning a Ferrari. And saying well I'm only gonna use four of the twelve so one. Okay thank you and that's what we've done we've been operating with for six of the twelve cylinders because at the same time. You know we've had a watcher regulations put in place to make sure you know to try to accomplish some other goals. Arm we've we've had dobbs you know higher taxes to try to have a balance a budget at the same time a smaller stuff. If you look at it now what we're doing is moving those restrictions to see what the Ferrari can do and you know let all twelve cylinders fire. And you know what's really happening now with the advent of the result of this political change. Is we're gonna see. Mean ticker this weekend. On the Indy I'm gonna talk a little later in the shot give specifics to pick at this way during the highest marginal tax bracket right now. At paying ordinary income tax you're around 44%. That's gonna go to 25%. That is a massive change in how much of your own money you're gonna be allowed to keep and then invest in something. Think about how much of that investment is gonna go back into the market place. I look at that I just say oh my goodness that's good from my investors church second thing to metropolis talked about doing and and I think he's got willing accomplices in the senate and the house is. You saying I'm gonna reduce Abacha the regulations have been put in place not weighing in on whether or not they were well intended are well founded or anything else. The difference is going to be there are going to be parts of our economy now that are going to be able to operate more freely and allow for more or OK and again as as somebody who manages money for individuals I look at I say. Mean and that's goodness and then the third thing that's pro growth of course is this idea of infrastructure spending and you know trump and Clinton both said they were gonna do what. But I really believe that trump was gonna hug me to do something significant witness and frankly this is gonna be done in concert with the Democrats because they want that happened to ensure. And as a result you know it bears a nice program that'll I'll be extra fiscal. Policy as well not just reduce taxes but also increased spending around infrastructure and all three of those things are very very positive or for the economy the one negative but the biggest negative I certainly can think out. As it relates to trumpet the end and the house and senate. Is going to be as it relates to what's he gonna do where it's protectionist policies are because these protectionist policies can. If she does implement them they could slow in some ways they would help certain sectors monitor other ways they might slower economic growth if we chose to have. Decrease our exports for example to different countries are not import as much or whatever I could clearly slowed down our economic growth but here's what. Many economists are handicapping at this point you're thinking that the benefit of those three positives is gonna more. Then outweigh any possible negative of any protectionist strategies and by the way last thing. A lot we know that trump has done a lot of posturing during this election. The real question now is what kind of protection sought the seat actually gonna propels what do you actually believe. What was real horses what was said for political purpose and by the way if you don't think he says stuff for political purpose and how can he inner view Mitt Romney right. I regret that tore them worry I just can't think of more horrible things that the two of them sat about each other current rate. And and yet this weekend. Mitt Romney is having a job interview at least hypothetically with trump about secretary of state run so it it does make you geeky she's some hole. That perhaps some of that was rhetoric and based on all of that I look at that for our investors and I say. This is a fantastic. Opportunity the last time we had this kind of opportunity where that was meaningful. Tax break that stimulated. Significant GDP growth was a long time ago I for one and excited to see what this Ferrari can do with. All the cylinders fire and bald you charged last Sigmund Bono of the stock market US stock markets are up in the last yeah last well since the election Europe 5% that just the S&P 500 is in the Dow's up even more than that. Now booed before the election did anybody call you insanity ball I'm afraid I don't know what's going on pull me though we did. We had we had a bunch of those caught not not a huge amount but a handful of those kinds of calls mark client base. Armed and we strongly encouraged people to me on not move out and by the way had they moved out. They would've just lost out on a five or 6% up on the market so you know it it for us we just didn't see the downside. Other than short term volatility. On the dash eight trump presidency might bring very short terms so borrowers that lasts about an hour and a half it's well last appeals threw about 1 o'clock in the morning very treasurer and then if it went away quite quickly and but I think I can you just don't know how much of that as posturing how much of that is political influence in two economic discussion a shank owner all you need to tell everybody that things are gonna be terrible but I'm. I was sitting there thinking myself how could economic growth not be bad error. With the trump presidency if he's talking about significant tax cuts it made. That tax cuts are nerve on the GDP growth because what they do is they allow people to keep more of their own money and and gas to the way that they won one vast that hopefully it. Up more productively than the government office and and sold to meet. That was a no brainer that and I sent this in our show well bull before the election. Intermediate term I sought trump presidency is being very positive. Because the impact of those kinds of policies I thought would be overshadow. Any short term volatility. We talked a bit about the bond market. We didn't cover completely have been covered overseas bond marketing changes that are yeah I know that they go. Everything's gone down I mean the price of bonds have gone down yields have come mop and the reason for that is because there's. There's a real excitement of ice tanker out there are now as it relates to. Opportunity economic opportunity United States not mean stocks. And it also means at the same time that people are demanding more yields for bonds because frankly they see the potential for more inflation. And if there's more inflation in the United States and interest rates go up in the United States you know what that does for the demand for existing bonds. Our overseas to go to our people say geez I can get paid 5% on a bomb the United States right get paid. 5% a bond in Brazil all take the United States thanks you're right. So overseas received changes were absolutely at the US dollar have been following it had been strong would have really leveled out in stagnated for awhile now what's gotten stronger I mean we're not at parity with the Euro but we're downward dollar six dock five a dollar sex that's that's actually pretty good lowest time to go to time to go to London he's our. Actually bought London's pound sterling sessions at the time to go to your go to dinner usually hero because. The dollar is very strong and again why. Because you're seeing. Demand. For our bonds demand for our. I stocks go up and as a result you're gonna see good demand for the dollar goal and the strength of the dollar coop and by the way on the and another reflection of that as what's happened the bond yields. A both in Europe and Japan it's actually brought those up also. I'm so yeah so are what we're seeing now is that of the ten year or five German bond for examples paying about point 3%. It wasn't a few weeks ago that it was below zero exactly right through a positive note it's a positive number and even the Japanese ten year is now at zero or slightly above zero and below for a long long time and all of this is frankly I think very good news. Four are not only the US economy but the worldwide economy. What do oil. Oil continues to fluctuate. A lot absolutely nothing to do where is our our presidential election has so much to do with supply and demand and oil and there as you know canned there's a big meeting of all pack on November 30 in Vienna. And yet again they're gonna talk about trying to reach some sort of production ceiling they're trying to target around 32 and a half 33 million barrels a day. Right now they're producing just almost 34 million barrels a day. And so it doesn't sound like a big cut unless you're though country that has to do the cut her right idea. And so it's gonna be interesting to see whether or not they're able. Are to strike such deal and by the way even if they can strike the deal will all the parties to the deal. Actually comply with the terms of they agreed to and all that's gonna come out. On him by the November 30 meeting. Will say you know frankly I see the price of well kind of awesome leading in in gnat you album mid to upper forties low fifties. For a period of time. One good piece of news that came out this past week about oil on the price of oil had to do with the demand for oil and the International Energy Agency came out this past week instead by the way we're doing our forecast looking forward for the next 25 years. And we see the demand for oil continuing to increase. Worldwide. Every year through 2040. So if the demand for oil's going up guess what happens it makes the price go up so if you are. And order our energy and ask her. That's some very good news in an and that's after taking into account all the moves to go green and electric cars and wind and solar and also other stops. There's still expecting forecasting. Worldwide demand for oil to increase. All we come back we'll look at some government data that we should be paying attention to and then of course will do another deep dive into the election implications. When we return to supply a strong financial for this is. All 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 media take a look at your investments and retirement plan called my office. 808897275260. That's 888972. Plan. Securities and investment advisory services opportunity for me to prevent member to go as I can sequester investment management is an affiliate of mismanagement 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 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 had planned strong investment management a schedule financial checkup call 888. 9727526. That's 888972. Plan commit to getting your financial house in order call 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial group member and SIPC plans to invest and manage our affiliate of next week grouping and OK I need to Washington street Dedham mass. Says financial talk into your signing and informative. At least it's informative it's still plans on financial forum where poll portions president's bold plans stronger investment management yeah. That I didn't Gerber vehicle does belong with all partisans. We just remind you hey if you're not sure if your portfolio is ready for trump presidency give Paula call. Eight dated 9727526. Is a phone number eighty 8972. Planned or go online to plan strong dot com. Just send an email hunger back to you on Monday you can sit with ball without which was your last three G Jones and those meetings as well the polls and everyone. And the what you know whether they think your portfolio was ready. For what's to come and you know what can you not that you bring that up I'm glad you did. Sick of all our latest stats have been about the we've been running for several weeks they've been all about risks associated with the securities that you didn't think we're that risky. And we talked about this on the program last friendlier way Alex and I on the conservative star yes well they you know that the stocks of folks figure all of these are risky right pale dividend right and will be happy. But you know what a funny thing was starting to happen Alex and I noticed it you know couple months ago or longer. But these things were getting really pricey but it finally got to the ridiculous level. That we were seeing that the pry insure four. The downside of some of these stocks was at of these quote unquote conservative stock was actually more expensive than the price to ensure the downside of what historically been much more volatile stocks. We said. Okay this is in cuckoo land now. And so we started duets on started to talk to people about are these things are not nearly as soon as secure as safe as non volatile as you think there are and you really need to pay attention and because. When interest rates go while these things are either either the market wakes up or interest rates go up one of the true. You're gonna have a bad day owning these things that you think are pretty safe there and shorn off. Interest rates popped after the trump presidency was on the election occurred. And for example our electric utilities. Pay a 4% dividend at some point that. They're down 6% since the trumped up election okay how sacked feel OK so I do wanna say that. You ought several of the suggestions that we need to have turned out to be quite accurate. And that it was only a matter of time it was whatever the trigger was going to be it was going to be but a trigger was gonna calm enough and when it did come. I'm then you know all of a sudden things didn't look as good as you thought they would so we might point to our listeners is pleased if you. Joseph if no matter how your portfolios position at this point. My guess is you have some things in there that we would suggest you not own and you probably have some things in there that we'd suggest to emphasize more. Based on what we now sees the landscape going forward and you know it's the only dinner Percy with a intro just there saying well see you know it's interesting and informative or at least you know it's whatever. The answer is I'm actually excited rate now suddenly it is exciting is exciting and the reason that it's exciting is because. Actually see a chance for us to make some real returns for our clients time on because. If you look at them the impact of a major tax cut. And at the same time stimulus spending. And reduced regulations. That is just such a nut and that's sweet music and Tony to two and investment managers yours that is great. News once again to call Paul's office if you would like Paul as an investment manager to take a look at your portfolio to see if you're ready for what's to come. There office numbers eighty 97275268. KB 972 plan or you can send an email at planned strong dot com. Are also retiring some data some of the things we learned from the government done. It was actually pretty good week of Dana retail sales were aux. Now armed and that's very important as retail sales are good indicator of what the consumer storing as we all know consumption represents about 70% of GDP. Armed and what this means if retail sales were up it also means that Q4 GDP may turn out to be better than we thought it was going to be hurt housing starts were also opt to one new high actually the new high since 2007. Another really good piece of data. Even manufacturing news wasn't terrible it was it was moderate. A there was some manufacturing expansion. In the in the months of September and October over the last few months that's the number that has not backs finished off the yeah absolutely. The inflation front I say things were you OK not great I'm you know we're looking at producer price is up about 11 point 2% year over year. And on the consumer side a little bit better on at around 2%. So getting closer to the Fed's target. On the on the bad side of the equation crude oil inventories were up a bit this past week you know that's not good news and you know as a result guess what price of oil has been. Down on the 45 dollar range. And then finally initial jobless claims were very very low 235000. That's almost an all time low since 1978. Or something like that incredibly low number. Yeah we heard from Janet Yellen and this is something that we've been discussing pretty much every week over the last several months is this the time is this the month is it coming why bring a lot of people said if trump. Was elected president and all bets were off for a rate increase in December and those are the same people says that the mark is gonna go through the floor. The short answer is the market didn't go through the floor are for much longer then you know three or four hours and after market trading unit were covered very quickly and was up as you we've all said about 5% cents. On his election. On and yell won this past week came out and said that she continues to see things looking pretty good. There's now about 90% chance of a 25 basis point increase in the Fed Funds rate and the December meeting. Always do this guy is go to the Fed fund futures market and take a look you can see it there so I think it's highly likely it's about us as confident as those markets get mugged at an interest rate increases coming and again another reason that you probably you wanted to not own as many of those interest rate sensitive stocks like you know on utilities and telecoms and an even nov real estate some consumer state. We've got another Elon Musk the story might my daughter's next husband how hot I thought if I keep throwing it out miracle happens and so I like this I like that it's true we should just added dimension reality on a just in case but he's been busy you had a huge. Vote this past week and that's a dug the big news story of one of the match because we've talked about it the past. On this idea of Tesla. Merging or acquiring solar city they actually did them the shareholder vote this past week. Are the results were tallied at a a meeting I think it was on the seventeenth. I'm an 85% of the shares voted in favor not audit so. Like it or not at Tesla now own solar city and Ilan mosques vision. Is is out there front center what I will tell you was solar cities come out these new solar panels that look like top roof tiles and act like roof tiles their very cool some of the bad news is there were expensive and you know for a very high end home. They may carry all kinds of benefits but. And by the way their low eights and their track Beers and all social which is all great stop and by the way they gather solar energy at the same time. On the bad news is they are much more expensive for example than traditional asphalt Sheila rushing one that most homes have so. And perhaps going forward we won't see as much government involvement in the solar industry lonely you know that's another one yeah you really have to wonder how much there's going to be of that with a trump presidency I think you know he said to a great green was to get out of the way in the energy business he wants to remove some of the obstacles that's happened with coal. And and so we know does the de corollary hold true with some of the subsidies for. You know some of these I don't know I wouldn't be thinking it's that greeted circumstance having said that I read several articles this past week it's sad. Got a trump presidency wouldn't hurt Tass sly and solar city as much as you might think it would so time will tell but. I wouldn't it's it's certainly not gonna be good news it's just how much bad news comes out which is really neat what needs to be digested now Warren Buffett in the news as well unbelievable. Story I never ever thought I would say these words never say never crawl exactly. Where Warren Buffett's Berkshire Hathaway disclosed new stakes. In three of the largest US airlines. Can you imagine so this is the guy have to tie and asked first what you might say well why is this knows who cares Buffett buys all kinds of good stuff these must be great companies hey that's great great for him. In 1989. Warren Buffett bought US air remember that. And this one of his famous. On EE if you asked him as he braiding his books later in life for anything else. They were you know they say we know obviously didn't bat a 100% you know if you could take anything back what would you take back in samarra there are the site take back buying airline stocks and one of my favorite things was in his 2007. Investor letter when he said. I durable. Competitive advantage has proven elusive. Ever since the days of the Wright Brothers are fifth in deed if a farsighted capitalist had been president kitty hawk. He would have done his successors a huge favor by shooting or build down but not okay kiss off. The girl so don't mince words what really me and so isn't that amazing out of it what here's the story the real story is big you look at the market right now. And they think the airlines have learned a lot of lessons. Through consolidation that they're not gonna get into these bitter fare wars and that they haven't all over added too many routes. And at that they don't think that they're lining themselves up for the same kind of circumstance they have in the past. Having said that I have to tie I wish I'd been a fly on the wall move forward from before we Buffett when one of his underlings brought the idea forward that he wanted to do this simply because. He has been such a full guard her opponent of these but he's got to be smiling there's got to be some value there are these don't want it. Now natural gas might have an issue and it's so funny because so many people think well trump presidency must mean really good things for energy matters it means kind of less obstacles right there. I think there's certainly a lot of validity to that certainly for drilling things are absolutely but here's the deal and and Cole of course right. But thicket it this way. One of Trump's policies involves getting word of some trade packs like with Mexico and that could certainly. Are hurt the flow of mutual of odd natural gas being produced in the United States and going to Mexico town and if you don't think it's a lot. Mexico. Actually gets 6%. Of the natural gas output. Of the United States it's a lot old and if they act. And by the way Jack has been growing. Year over year significantly faster than the demand for natural gas in the United States. And so. If Mexico. Is no longer able to do what this could really become. An adverse. Impact to natural gas producers and especially drillers of natural gas in kind of the tax serious so certainly something to watch one area of the energy market that may not benefit from a trump presidency compared to some other areas ball when we come back that deeper dive into the election implication for investors when we return its plans are confidential for this as. All Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what you need to take a look at your investments and retirement plan called my office at 808897275260. That's 888972. Plan. Securities and investment advisory services opportunity financial group member to me as I can sequester investment management is an affiliate business financial group Lincoln is located in Washington street and Massachusetts. Hi this is loving 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 the matter watcher invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment. That's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial group linked member fender SIPC plans to investment management is not an affiliate of residential roofing and we'll give you and I need to Washington street Dedham mass. Ground zero for your financial news and economic commentary. This is the plan's strong financial forums where bald portions president of home plans stronger investment management and. It's. The. And I'm Kent Herbert V anchor desk along with Paul Parsons and we're talking about. What's happened the last couple of weeks through the economy is in particular for investors what they should be paying attention to and pol. There are lots of implications are for this election we talked about it a bit last week we only had three or four days to look at his last reached. A programs are now we had another week to look at what's going on in what many go on going forward I think. The real question on that enables us. Trump is Scott command with the senate and house. And he's gonna propose a real pro growth strategy and arm and that's going to be. How Roy grow GDP well it's gonna be less regulation. Lower taxes and fiscal stimulus program. Kept all three of those things Smart and it's gonna be somewhat offset by. Some sort of protectionist strategy we don't know what that is he hasn't. Really talked about that Aaron all he has though given us some ideas about what kind of tax. Changes she's contemplating and I have to tell you that these are very meaningful. So let me start with axis because the impact of a tax cut. A significant tax cut him is. Probably one of the greatest. Bomb. Schools. That a presidential administration can use to stimulate economic. Gain and I'm it all you have to do is look at history. Look at when I Kennedy slash Johnson did it in 1963. Look at when Reagan did it in 81 and 86. You can just see GDP growth that is just astounding when you actually cut tax. Here's what he's talking about doing on the individual income tax he's talking about collapsing at the current seven tax brackets. Which range from 10%. Almost 40%. In 23 brackets. 1020. And 25%. Saw highest marginal tax bracket. 25% a. I went the simplicity to be just easier to figure out where you fit in in that in that two scheme yup and think part of this weekend. That doesn't include the obamacare are surcharge is well he has talked about getting rid of those also. So if you're in the highest marginal tax bracket you're paying close to 44%. OK before you get to state income and you're paying 44%. That's gonna go down now 25%. That is the huge amount. Of income but people currently are paying to the government that they are now going to be able to keep and redeploy. In in a way that they Warner redeploy it and guess what they're gonna buy stocks and bonds with that they're gonna investing capital projects they're gonna invest in their own businesses with it if they don't pan out to the government they're gonna do something else with it. And that is something that is gonna really stimulate now having said that let's talk what some of the of the little details in this. He's gonna increase the standard deduction. To 25000. Dollars to single filers. And 50000. Dollars offer joint filers from an and it's going to be indexed for inflation that's a huge increase. He's gonna leave the personal exemptions unchanged around 4000 dollar purse. Dividends and capital gains are going to be taxed and a maximum rate of 20% so no change there and on he's gonna limit the valley that the value. Of itemized deductions that are going to be subject to taxation again so this is nice because. Remember what Obama did well was he lowered and lowered lowered the amount of exam of deductions that people could take. On and what trump is gonna do is he's going to increase that again it's gonna be a allowing people keep more of their own money. He's gonna repeal the Alternative Minimum Tax. And if you think that's just for wealthy people you're crazy there are a lot of middle income people would get caught in the Alternative Minimum Tax. And how convoluted the darn thing in as you're have a lot of middle class people organization thank you like and actually keep a little bit more my own money and deploy it how I wanna. And then finally a big one and this is a negative. Four especially the venture capital private equity world. He is gonna tax carried interest as ordinary. A business income that's a big big change and you know what that's gonna. Us stop an awful lot of people saying oh well I don't pay a lot in taxes or. I pay a lot less in taxes than my secretary Bruce that loophole is going away drive the bad it was for that is. I think that will decrease the amount of funding available. Are too you know to be out there are four ventures and from private equity and so forth. The good news is you know he could certainly argue Dowd it's gonna allow him to have people pay a bit more than they have in the past and especially those that were especially while the. Ransom. Bringing Ted that's the one area where folks are going to lose a deduction. But it never were also looks like Gibson it's coming down the amount of to taxes socially thing for individuals absolutely and here's the other one that's just pick the corporate income tax rate of and I don't know this for a long time we've been seeing a law companies. Especially in this area you've got a lot of. On our way or another Brokaw Andy did the whole idea these were these conversions and corporate versions are winning elsewhere they life. You know by a company that was domicile and Arlen just so that they could avoid US income taxes corporate income taxes. That's all gonna go way because he wants to take. In the corporate income tax rate down from 33%. Today which is absolutely uncompetitive with almost any country in the world come down to 15%. To OK and that will be competitive with a almost everybody in the world and that by the way includes distributions. By escort so small businesses will Malkin now pay distributions. Will be taxed at 15%. What a difference. There's a huge difference there what about we tartan in last week's program about repatriating. Captures a lot of money out there are trillions there are trillions does his or. Trillions of dollars Selena for folks who are aware of that so there a lot of companies that make money overseas they have you know the businesses in Europe and China and other places but they don't re they don't bring the money back to the United States because when they do and it's subject to arm up right now it's 43%. Corporate tax rate they say forget and so as a result they've capped the tactic they are cash. Overseas. In if you will bank account sobering investments overseas and not brought it back to the United States and ultimately. Put it back to work elsewhere around the world within their business well what their target but now seek corporate tax holiday for. Are those assets. And it's gonna be a one time 10%. Tax rate now and frankly this is a way that trump think she's gonna pay for an awful lot of these tax cuts. Is taking that 2.2 trillion dollars and repatriating a bunch of at a 10%. That's gonna be a lot of money to the US treasury that there'll be able to use to. Pay for somebody's thinks the Soros Simone it is spending infrastructure things like our gas so and like I said both are Clinton and trop. Had proposed this but it looks like on the infrastructure side. -- she wants to do about a trillion dollar program to rebuild highways tunnels bridges airports and hospital and so I think you know it's obviously very very large scale are we heard politicians and unprofor in all fairness yup absolutely and and eaten by the way he's also wants to do transportation and water infrastructure think about the pipes that are under our streaks today especially in our aging cities that are you know at least punch a hundred years or they're clay you know and is something like they fall apart. So and spending has gotten down so low in all a special a lot of the cities because they can't meet their pension obligations. So this is such a nice way to perhaps build out some of that infrastructure as well. So it looks like arm this thing will go through it looks like there may be some push back from conservatives. But I think that Tom we will see an infrastructure project a winner in major infrastructure practical win. And what does it mean for investors will you certainly wanna look at companies that stand to benefit from this. For example. On aggregate producers people make concrete stuff and also that's Vulcan materials and Martin Marietta Materials they are huge producers. Awe of what's called aggregate. On construction services for firms like you know and core and Jacobs engineering and floor are you know several. And then of course unique construction of our vehicles to push all the stuffer on I guess I don't need to tell our listeners that they've been watching route 120 lately and pretty hot and the you know that's caterpillar. I'm so a bunch of these companies could be in better shape. As a result of this kind of infrastructure spending and what about defense spending trump did mention that Yasser and again I think this was one of the more obvious plays. In the difference between trump and Clinton was a truck presidency would probably lead to more defense spending. On and he's vowed to repeal the defense sequester. He wants to end the budget cap and most importantly wants to increase the size of the US military and modernize it. And so I think there's going to be a decent amount of money spent on this including cyber security defense that's a big one. So could this benefit we'll think about Lockheed Martin no dare the Pentagon's biggest. Contract. You know there a date it's probably good news to them up or ship builders like Huntington Ingles for example or. You know aircraft manufacturers like Boeing for example all of these guys. A tech you know Kenny depends who wins the contracts. But it's good news that trump won the election if you are in this business and now it comes down to selecting. Which companies could benefit the most based on what policies you think are gonna go one place. Any changes in regulations you for sees that could affect investors will probably the biggest change in regulations could have to do with the financial me financials got two things just happen. One is finally interest rates went up a little bit and as we all know financial benefit when interest rates go up because. The amount that they were able to charge people borrow money from them. Goes up and yet how much they actually pay you I told borrowed your money and doesn't move nearly as quick ran the difference or he is called net interest income. And that number is gonna go up and that's gonna be more profits for banks or interest rates are by themselves with higher inflation will go up that'll be good for financial spot on regulations which is the question you just asked me about. Regulations. Can also in their there's certainly some dissatisfaction with Dodd-Frank you know and with that I think that you could see Dodd-Frank and parts of Don frank goal weigh in and he could probably see aspects of Elizabeth Warren's brainchild that the Consumer Financial Protection Bureau. Could also take a hit. Both of those are could allow for. On the financials to benefit from that so rolling back some of the U regulations from these Kennedys might increase the risk in the marketplace but at least in the shorter term would more than likely be positive. For financial institutions and their profits. Postal remember once again ADB 9727526. Karl that number to see if your position correctly. For trump presidency Paul has been a chock full program thanks so much see you next week sounds terrific it supplies strong credential for. This is tall Parsons president of planned strong investment management and you're listening to them plans strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what needs to take a look at your investments and retirement plan called my office of 808897275260. That's 888972. Plants and. The information contained herein is obtained from sources believed to be reliable but accuracy and completeness or not guaranteed neater next financial groupings nor represented to provide started.