Doomsday Bunkers & Earnings Season Beats/Duds, Ep. #214

In this week's episode of The Capitalist Investor, Diamond Hands D, Tony the Tiger, and Cool Hand Luke are back with some intriguing discussions. From tech giants reporting earnings to the impact of wage deals on companies like UPS and the uncertainty in the financial markets due to the Federal Reserve's recent announcements, the trio covers a wide range of topics. They also dive into the intriguing world of doomsday bunkers and share experiences and concerns about traveling abroad. 

1. Earnings Season and Tech Giants' Performance

Earnings season served as the focal point for discussion as the hosts dissected the performance of tech behemoths like Microsoft, Google, and others. They touched upon the phenomenon of multiple expansions, discussing how certain stocks are priced for perfection despite challenges in earnings growth. The allure of artificial intelligence and cloud computing as key drivers for economic impact, particularly in the context of Microsoft's Azure business, captivated their attention. They delved into the market’s reactions to the earnings calls and provided valuable insights on the growth trajectories of major players.

2. UPS Declining Revenues and Job Layoffs

The hosts shed light on UPS's $9 billion revenue decline and their decision to lay off 12,000 jobs, prompting a lively debate. They pondered over the implications of such significant workforce reduction and captivatingly analyzed the underlying economic and strategic motives. An invocation of the impending impact of technological advancements, such as autonomous driving, added another layer to the conversation, leading to contemplation about the future of automation in the logistics sector.

3. Doomsday Bunkers – A Manifestation of Foreboding Uncertainties

A departure from stock market discussions, the hosts delved into the curious allure of doomsday bunkers. With intriguing humor, they explored the costs and functionalities of private bunkers, seamlessly intertwining expressions of concern with lighthearted anecdotes. While the recurring theme hinted towards risk, they also unearthed the appeal of bunkers as potential escapes from everyday pressures, offering a humorous take on the concept of seeking refuge during tumultuous times.

4. Travel Abroad: Safety and Risk Considerations

The hosts tackled the complexities of international travel, delving into travel advisories and concerns about the safety of various destinations. A compelling dialogue emerged as they discussed the shifting risk perceptions associated with travel and pored over recent developments in popular tourist destinations. The juxtaposition of Tony’s apprehensions and Luke's personal experiences added layers of depth to the analysis, providing listeners with diverse perspectives.

5. Personal Anecdotes and Light-Hearted Banter

Embedded within the intricate weave of financial insights and global concerns were personal anecdotes and light-hearted banter. From reminiscing about favorite sandwiches to sharing quirky travel experiences, the hosts infused the podcast with elements of warmth and relatability, fostering a connection with their audience beyond the realms of conventional financial discourse.

#CapitalistInvestor #EarningsSeason #TechStocks #Investing #UPS #FedAnnouncements #TravelAdvisories #JamaicaTravel #DoomsdayBunkers #FinancePodcast #InvestmentInsights

Transcript

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Hello and welcome to this week's episode of the Capitalist Investor. As always, you have me, diamond Hands D. And the boys are back. Cool hand Luke and Tony the tiger. What's up, guys? Sup? How we doing? Keeping it real. I had one of the best sandwiches ever had cheesecake factory last night. Sandwich? Yeah, it was like a ribeye cheesesteak, aju sauce, like sandwich. And it was. Was there a lot? Okay, so there's a lot of meat on it. About this. Yeah, we were talking about this before real quick. I don't think you're supposed to get burger meat medium rare. I thought it was more like going to be steak meat. It was more burger meat and medium rare. I'll tell you what, I'm going to get all my burgers medium rare from now on. I don't care if I get. You have to. I don't care if I get salmonella. It's really good. I used to do medium well. It's like medium to medium rare nowadays. For the hamburgers, I'll risk it. I'm going to risk it because that was so damn good. I'll risk it for the biscuit. See, I'm like a double meat guy. I'll go to Mr. Hero and double down on the meat. Double meat, double bacon. Yeah. Just crush heart attack on a plate. Yeah. And I'll even throw away a piece of bun. So it's just like the top or the bottom of the bun because I'm. Just good for health reasons. Yeah. Healthy, obviously. And we're moving on. All right, what are we going to talk about today? We are going to talk about it is earnings season and the big boys are reporting this week. All the tech. We're going to be big boys. After all the steak sandwiches. Yeah, the double meats. We'll get you a husky. Like I said, I work out so I can stay husky. It's not to lose weight. I just trying to maintain. All right, big boys reporting. Big boys reporting. And when I say big boys, all the mega tech that supported the market last year, ups laying off people, stock declined, revenues are down. Let's talk about that. We're going to talk about doom day bunkers, fun little thing. And then we got a canceled. I've been saying this for years. I live by it for the most part. And I think it's a public service announcement. All right. Earnings, they've kicked off and we already have. Like Microsoft reported, Google reported. I think Google's down. They reported. So here's the thing. Our investment team kind of says this all the time, that these stocks, the Amazons, the Netflix, the Google's, the Microsoft, they're priced literally for perfection because they have not like Apple for like they are priced for perfection because they had negative earnings growth last year and they still went up. How is that possible? It's called multiple expansion. It is betting on the come is what I'd call it if you're a craps player. Right. And I don't know how long it's sustainable. But I could also argue that nobody knows anything else. They know these seven stocks. They're scared to dip into the other 493 stocks. And if these stocks go down, does the average investor look at it as a buying opportunity? So guys have any comments on what do you guys think on that? I think the winner, yesterday's obviously artificial intelligence. I mean, you look at what Google talked about, Microsoft talked about, what got investors excited was obviously the cloud and AI aspects of all the businesses. Right. It's the same story we've been talking about. And the obvious winners is those that play in the artificial intelligence space. I think coming off the earnings calls, I mean, you take a look at Microsoft's cloud business, Azure I think still grew to 25 or 30%. It's insane. I look at that as an economic forward mechanism, right. Because Google has obviously their digital ads, not their digital ads, but their digital space, the storage. Right. The cloud. And as long as the cloud is still growing, that means businesses are growing. They're capturing data, they're saving it somewhere. I think once you see cloud, obviously the acceleration of how it's growing is slowing down, but it's still growing. The fact that Microsoft's biggest, one of their biggest businesses internally being the cloud, is your business still growing at 25, 30%? It's a 2 trillion or $3 trillion company, right? Yeah. This is where we talk about, this is what I really want to get across today when we talk about Microsoft, why we like Microsoft so much more than like the apples of the world that's still valued at $3 trillion. Apple is not growing at any of their businesses like at 30%. They're not rocking and rolling like Azure is for Microsoft. So when you talk about multiple expansion, Microsoft's valuation might be justified because they're still growing rapidly. Of the seven, multiple might not be justified. Of the seven, the magnificent seven of last year, Microsoft, I feel the, they're the horse to beat, right. I think they are appropriately priced. Everyone else, again, price for perfection. Yep. For know the other side of the, you know, the reason they're down is like their ad revenue was amiss. So people aren't advertising. That's not a good thing. But I look at cloud as one way. AMD was one of the biggest reported. We haven't talked about them. I mean, AMD kind of sheds light on the chip manufacturers. Right. And they kind of guided a little lower than people thought. So they beat top and bottom line, but they guided a little bit lower forecasting. But didn't they come out like a couple of weeks ago and forecast like, hey, we're going to make like four extra billion dollars this year and the stock went up 10%. Yeah, they boosted like $1.5 billion estimates. They already kind of set expectations. They set expectations and I don't know, maybe they're just like not setting themselves up for failure down the road. Like, hey, we're growing, just maybe not as fast as. And, well, I think they're playing it smart. They know how focused investors are, Nvidia and AMD both, and all these chip, so they know and understand the environment we're in to where investors are getting excited. So they're really trying to tame expectations. So that way they don't have a 50% sell off down the road at some point in time. Yeah. So, yeah, as more people, I'm sure there'll be more earnings for later this week. So maybe we'll have some more insight next week on how all the mega cap stuff plays out. Next topic was ups. They said they saw $9 billion decline in revenue year over year. It seems like a lot. But then they also made the headlines by laying off 12,000 jobs. All right, that's like 3% of their staff or their staffing. Right. But how many people did they hire for the busy season, the holiday season? Probably 100,000. So did they really get rid of 12,000 people or keep 90 a question mark. Question mark. So I don't know. It depends on what lens you're looking through. And also, like you mentioned it last week, Luke, like reading through the headline, like, what's really happening? Right. We talked about the, you know what really know. This is what I always ask. This is my mentality in life. It's like, what's really going on? And when I look at this UPS scenario, I think it sheds a lot of light into actually a topic we talked about probably six months ago, remember with a Teamsters deal, when Teamsters were fighting all the unions, the union was fighting all these companies to get good jobs and raise wages and things like that. The ups drivers in like ten years are going to be making, what, $180,000 with the deal they struck. So basically to keep the drivers on. This is the same thing we've talked about economically. Right. It's like the minimum wage philosophy. You raise the minimum wage, what ends up happening? Workers get replaced. This is what's happening. It's already happening with UPs drivers. They're preparing for the next ten years and saying, okay, we're okay with giving this deal, with this Teamsters deal, we're okay giving this deal to you guys and raising your wages as much. But not all of you guys are going to have jobs anymore. Right. And UPS is probably on the pathway of. We talk about autonomous driving. We talk about evs a lot. Right. What about the ubers of the world? The ups of the world, they're able to deliver autonomous, eventually autonomous packages with their autonomous driving capability. With the drone. Yeah. Will there ever be any workers ten years from now, even at this point? So they think this is actually the pathway to lightening up their workload because they're paying these people more money and eventually they're all going to be gone anyway. Yeah. That was the first thing that came to mind for me, was all the memes six months ago with the UPS drivers and how much money that they were making. This is an inevitable step after something like that happens when you pay people too much. This is going on in every single industry. Just kind of the shift of moving from kind of the power on the employer versus the employee. The employee has the power right now, and we've seen it with all these deals that have come through in the last year. But that is going to shift, and that is going to shift soon. And it's kind of like the college nil deals. Right. And I'll always bring it back to some kind of random sports metaphor. Eventually, the people who are putting in millions of dollars are going to realize they are getting absolutely nothing for the money that they're putting in there. And that is when it's going to start to become more reasonable. There's no reason to pay four star recruits$10,000 just to come for a campus visit. That is insanity. The wages that are being negotiated now for important jobs, I don't want to minimize any jobs at all, but if you pay your employees way too much, it's going to have effects up the line and down the line, and we're seeing that on both sides. And this UPS example is a classic example of that. Yeah. So I guess we'll see how that plays out. I'm sure FedEx will fall in line as well. They won't because they don't have that same deal. They weren't getting the whole. Yeah, but they're going to have to figure something out because they're going to have to stay competitive with UPS. They're going to have to stay competitive. I think this is the power of the free markets. As a company, they have more flexibility than someone like ups, so they're able to adapt quicker and not have to make these big changes and shifts. Yeah, I don't disagree. But if one company does it, why wouldn't, if that X guy leave to go to ups, other than loyalty or whatever? Maybe they're not, but maybe they're letting people. All right, so just before we hit the bunkers, the doomsday bunker thing. So the Fed is coming out today. Could really move markets. We obviously tape on a Wednesday, they're going to talk on a Wednesday and you're going to maybe see the ups and the downs of that. But as they talk today, what happens tomorrow? Any idea what they're going to say? Any vision of what that dude's going to come out? Blah, blah, blah, blah, blah, blah, blah. A whole bunch of nuts. Does a bunch of crap send the market downward spiral? Again? It's bad news, is good news for the market. Here's what's going to happen. I think the six rate cuts that the market was pricing in is very much over the top. Jerome said three. My boy Jerome said that there's going to be three. The market priced in six. I think you're going to basically hear very much of the same. Said six is going to go down to like five. The analysts are going to say, oh, well, based on he said three again, so maybe we should go. Probably. That's what I think is going to happen, actually. Yeah. All right. I don't know much, but how could anyone think that there was going to be a rate cut in March, in December? How is that going to mean? And if you're pricing in six, they don't do anything less than a quarter. How it's going to happen. We shouldn't joke about that. You know how that's going to happen. Very similar thing. Possibly like last year with Silicon Valley bank. That's how it's going to happen if something breaks again. Because what was it, early March last year at Silicon Valley bank broke hypothetically. I'm not saying it's going to happen. That's the only way we have rate cutting. Yeah. One of my buddies, he's a perma bear. He's looking for things for the market to go down. And I guess there's a bank in New York that's on the cusp of going out. So is it a single bank or is that the first domino? We'll see. It's one of my favorite, the big short, one of my favorite movies, obviously. What was it? One of the characters in there that was played by Steve Carell, that character. I love the part when they were talking about him as a kid when he was trying to find discrepancies in the Bible or whatever. It like, it's like Permer bears. They're always trying to find discrepancies somewhere in the know scheme of this philosophy of what all is good. Trying to find the discrepancies, what's wrong. System, but trying to. I get it, though. I get it because I kind of like that too. Yeah. And then just one other topic that's just so random that I saw that we topped$34 trillion of federal debt every day. I see that number and I see how, quote unquote, consumer confidence is good and the market's going up. Like, man, is our market being propped up by the government? Yes, since 1972. But isn't he like a trillion dollars was in jet? Well, I mean, there's probably a lot of debt, interest in that money, but not that much. Every day when I drive home, do you ever see that sign in downtown Cleveland area? You ever see it go down? No, never. I think when I first moved up here, it was like 65,000. Now it's 110,000. I'd like to just see it stop. Just stop for a day. It's like average debt. Just so the viewers know. It's average debt per person. And there's a big billboard that just counts dollar by dollar every single second. And, yeah, like I said, I was 65 when I started. 110. I was 65 when I first moved up here. I've been there for like five years. Yeah, 110 a person. Does that include like kids and babies and stuff or is that like working? Good question. I know. What's that number? I'm pretty sure it's every single person. Yeah, I think the family loads like two and a quarter. 250,000. It's crazy. All right, moving on. Doomsday bunkers. So after the debt explodes, our country, let's move into a bunker. How much do these bad boys cost? Hey, so it's crazy. I don't know. I was watching, they had like a segment on Fox business. So there's two versions of what I saw. And obviously they have these huge missile silos that were housing intercontinental ballistic missiles that go down seven, eight stories. And now they're just refurbishing them so that a normal silo can, they say, can hold 75 people for five years. That's insane. That seems like a long time. And they're selling rooms, like a hotel room size thing is like 500 grand. A two bedroom, one bath is$2 million. All right, so they're selling these quote unquote rooms and something happens. Like a bomb goes off or a bomb rips across the sea from whatever country hates us at this moment, which is a lot of them. And how do you get to your bunker? Is it in your backyard? No. So that led me to read about the guys that are a business here in Akron, Ohio, that is building bunkers. So they'll dig a hole, put a bunker in your backyard. And I have about an acre of land. I could do this. Yeah, you could necessarily. I don't know if I'm. Your neighbors are going to be looking at you like, what's up? They won't be looking at me when things shithead hits the fan. All right, let's be more realistic. You obviously want to be close to a bunker if you're trying to do that and you put it probably in your backyard. Right? I couldn't figure out how long you're able to stay in there because if a nuke bomb goes off and you only got three week shelf life, there's. No way you only have three week shelf life. I guarantee just the stuff for the crap I have in my house, I could probably last like a year. All the munchies and junk food I have, whatever it be. But it'll eventually get about a year. You like that spam? That stuff's probably got. That's got like a four year shelf life. All the rice you have or something like that, somewhere, somehow you'll be able to make it last. You're not going to consume 2000 calories a day. You might consume 500. You'll be ration it, maybe. But yeah. The key part to the bunker is you got to buy the non expiration food. Like a pallet of that. Remember the astronaut food, where they would take the astronaut? Like, put that stuff in a ziploc bag and ice cream that didn't have to be frozen. Right? I don't know. I have two things I want to say. First off, if something like this were to happen at that point, what's sometimes the point? I'd probably be like, Woody Harrison is his name. Woody Harrelson from 2012, when he's on top of that mountain screaming, like, come at me. Bring it on. You bring it on in the whole world. Yeah, it's beautiful. That would be me. That would be me. As the world is erupting around you. The second thing I want to say is, I think this would be awesome. Not just for, like, a doomsday scenario, but to get away from your wife or girlfriend. That's called a man cave. There's different ways to do that. Just looking for some alone time. Honey, I'm going to the bunker. Come find me there. I'll be in there just relaxing. And then she's going to start shoveling the dirt on the door. Get out. Well, the owner of his name, Tod Stump, down in Akron, the US bunker company, he just made comments, though. He goes, some people, like most people, are worried about nuclear war and stuff like that. He goes, actually, quite a few government and White House officials who have lost confidence are big buyers of this stuff because I'll call that insider trading information. That seems like bad news. Yeah, the people that are in the know are buying know that is kind of scary. But they, like, some people are buying for natural disasters or a hurricane's coming, a tornado, something like Palestine. I'm more concerned about civil unrest. Like a new movie on Netflix. I think it was directed by the Obamas, which is a different conversation, but I actually kind of liked it. I forget the name. Crap. I gotta look up with Ethan Hawke on Netflix. Yeah, it's on Netflix. It's like, about the world kind of ending. But basically, the cheapest, most budget friendly way to destroy a nation, essentially, is to make them confuse, shut off all their kind of communications and stuff like that, and they self implode and turn on themselves. Sure. So civil war, things like that. Civil unrest, I mean, crimes going up here in the US, that's what I'm concerned. Know. Talk about the border, you know, terrorist attacks. Who knows? But that will create civil unrest and possibly civil conflicts. Yeah. The fact that no one's being deported from all these people coming over the porter, is some scary stuff, man, that might not rear its ugly head until they. I mean, until they organize. There's people that are. Isn't the cheapest bunker, like 21 grand, though? It's like twelve grand. I don't know what gets you one little room, but. Yeah. No, I think you need a lot more than that. Yeah. I don't even know if you can buy a plot in a coffin for that much like Jesus. True. A bunker for twelve grand is basically just a hole. Here's a cardboard with a roof. You're not going to last in there for too long. You need water, you need air circulation. So we didn't have a canceled, really designed for the show today, but I saw something earlier this morning, and I've been saying it for years, so canceled traveling, vacations abroad, man. I've always said this, man. I really get nervous when I travel outside the United States because they don't have the same rules and protection as we do. The travel bans go from, like, one is normal, and then four is like, don't even think about going there. Right? So your fours are the typical Middle east parts of Europe now, things like that. But when we start looking at where Americans like to travel, aka, like, Mexico, Bahamas, and know Mexico's in between a two and a three and a three is reconsider travel. You bought your ticket. You should really reconsider going. Maybe see if there's a cancellation policy with whatever the hell you bought. Right. Bahamas is at level two. There's been 18 murders so far this year, and the travel ban is in the major cities, Nassau and Freeport, like, where all the cruise ships go. The Atlantis is of the world, Balmar. Like, things like that. But Jamaica, dude, they're going into the resorts and robbing and killing people. You should highly consider not going to Jamaica. I had a great experience last year in Jamaica, man. I was scared for you. Yeah, I went to Jamaica probably eight or nine years ago. It was one of my favorite trips. It was awesome, you know? Again, you got to risk it for the biscuit guys. Risk it. Well, when did I go? I went to Jamaica, like, right after high school, right after college. It might have been 20 years ago. My experience was not as lovely as what you guys, but I was on a cruise ship. It's a good story. Did I tell this story yet? No, but I know the story. All right. I was on a cruise ship. Obviously, I'm right out of college, so I was partying a little hungover, and me and the people I was with were, like, some of the last people to get off the boat that day. So I didn't get a normal cab. I got, like, a minivan that was rusted out and had a sticker on it that said, like, taxi. That could have tipped me off, saying, like, maybe I should just go back on the boat. But we pushed through, and then me and my wisdom go, hey, you know what I'd really like some authentic jamaican food, chicken. Take me there, and everyone's on board. Next thing I know, I'm in, like, I don't know, maybe a ten x ten shack. Literally a shack. There was a dirt floor. There was a three legged dog in the corner. And I'm like, okay, this isn't necessarily what I was thinking. Can we go somewhere normal? And we were just getting run around town, and we were the only taxi in the parts of town we were in, man. Like, I was a little concerned. We finally went into something like a TGIF Fridays. We kind of got there, but they still said, hey, just don't drink the water. Here's a bottle of water. You're like, okay, we're drinking beer anyway, right? So that's my Jamaica story. I will not go back after that experience. But you guys see, we had a. Little private tour, and we went whitewater rafting. Nice. Spend a little extra dough, and you can get to have a good experience. Yeah, I mean, people like to travel abroad and can't. Just makes me nervous. If anyone's in Jamaica, I still follow the guy on Facebook that gave us a private tour. So if any listeners are out there want to Jamaica, hit me up. I can give you a good referral. Tony's sitting here shivering, and Luke's like, hey, I got a referral for you to go travel Jamaica anyway. All right, well, on that note, we'll wrap things up. Thanks for listening this week. If you have any questions or show ideas, hit us up at info@swpconnect.com and we'll talk to you next week. The opinions expressed in the podcast are for general informational purposes only and are not intended to provide specific advice or recommendations for any investment, legal, financial, or tax strategy. It is only intended to provide education about the financial industry. Please consult a qualified professional about your individual needs.