Capitalist Investor

The Election, IRS, and Denny's Closures, Ep. 296

• Strategic Wealth Partners

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Capitalist Investor: Unpacking the Week’s Hot Topics on Politics, Stocks, and Economy

In the latest 10-23-24 episode of the Capitalist Investor, hosts Derek, Luke, and Tony delve into a range of compelling topics, from the political landscape to stock market movements and economic strategies. Here’s a detailed look at the five hot topics discussed by our expert hosts this week.

1. Trump Social Stock - Meme Stock Dynamics

A significant portion of the episode was dedicated to analyzing Trump Social Stock (DJT). Described as a meme stock by the hosts, Derek and Luke debated its viability and future. The major point discussed was the stock’s reliance on right-wing investors and the potential impact of the upcoming presidential election. If Trump wins, the stock might soar, but a loss could plummet its value. The conversation underlined the risks and speculative nature of investing in such politically charged stocks.

2. Election Odds and Market Implications

With the election season in full swing, the hosts couldn't ignore the shifting political landscape. Derek provided updates on the election odds, highlighting Trump's lead over Kamala Harris according to Vegas bets. The discussion moved to the emotional and often irrational reasons behind voters' preferences, especially in the context of polarizing figures like Trump. This segment underscored the unpredictable impact politics can have on markets and individual stock performances.

3. Janet Yellen and IRS Enforcement

Federal budget deficits and IRS enforcement strategies were another focal point. The hosts dissected Janet Yellen’s plans to beef up IRS audits to close a $668 billion tax gap. Luke questioned the efficiency of hiring 60,000 to 80,000 new IRS agents, suggesting the costs might neutralize the gains. Tony and Derek expanded on the broader issue of government spending and inefficiency, advocating for a leaner, more accountable administration over increasing tax burdens on the populace.

4. Government Spending and Economic Philosophy

Moving from IRS enforcement to a wider economic discussion, the hosts touched on Trump's proposed tax cuts and tariffs. Luke critiqued Trump's promises to make various incomes tax-exempt, pointing out the potential pitfalls of such broad exemptions. The conversation broadened to include the benefits and drawbacks of tariffs as a revenue-generating strategy. Tony brought up the example of Argentina's Yavier Gerardo Millet and his radical government reforms as a model for potential U.S. efficiency improvements.

5. Economic Indicators: Denny's Store Closures

In a nod to tangible economic indicators, the hosts discussed Denny’s announcement to close over 150 stores. Despite a smaller than expected dip in revenues, the fast-food chain's decision highlights larger economic trends. Luke speculated on the broader implications for other companies like Starbucks, which also reported declining sales. The conversation wrapped up with a reflection on the changing consumer behaviors and their impact on both low-end and high-end retail sectors.

Conclusion

As usual, the Capitalist Investor team provided a rich, multifaceted discussion on some of the most pressing issues affecting both investors and the general public. From the politicized stock market maneuvers to large-scale economic policies and trends, this episode serves as an essential guide for anyone looking to navigate the current financial landscape.

Stay tuned for more insightful analysis and expert opinions in the coming episodes of the Capitalist Investor.

This week’s discussions provide a stark reminder of the interconnectivity between politics, economics, and personal finance. With the election just around the corner, these topics are more pertinent than ever. Tune in next week for more nuanced takes from Derek, Luke, and Tony on the Capitalist Inves

Hello, and welcome to this week's episode of the Capitalist Investor. As always, you have me, diamond hands d, and we got the whole crew again together today. Tony the tiger, cool hand Luke. What's going on, guys? Living the dream. Yeah, you are. These trees. Look, this is the good thing about Ohio. Right now, we're looking outside of the office, our 12th floor. Here, we can see some trees. One's red, one's orange, one's yellow. This is what I like about fall. It's a small things in life. Take a snapshot. It's going to be here for about a month. Those trees will be bare. The skies will be gray, and that's why we love Cleveland. Well, I mean, the Cleveland weather has been absolutely phenomenal. It will be until January. It didn't used to be like this. It never? No, not when I was growing up, back in the day. But, yeah, it's just. I don't know. The season is getting a little bit longer, but who knows? Maybe we'll get snow. Sometimes in life, you just gotta slow down and look at the trees. Yeah. All right, man. I like it. All right, so this week, obviously, we got the election in full force here. And, you know, something that's picked up since last week, the Trump social stock. So we'll talk about that and just general election stuff as well. We'll also talk about Janet Yellen and IR's enforcement and her plan to get more money into the coffers of the government. And then we'll close down with a, you know, I won't say a fun topic, but, you know, definitely something that caught our attention here at the end. So we were talking beforehand, you know, is now the time to lay some big money down on. What is. What's the ticker, DJT, Donald J. Trump. Trump social company that loses $100 million a year. Yeah. The only problem is it's not really a real company. I'm not really sure. So again, it's. I said it last week. It's a meme stock. Yep. So how far before it really takes off? So, like, when you had the real meme stocks, that is when the left and the right came together to make money. And this. The big. The big wit, you know, the big. I guess, like headwind is that the left will never buy this stock. So it's only right wing bought, right? Yeah. Argue with me that I'm wrong. Well, okay. Well, unless they're just cap. You know, they're. Well, let's talk about this real. This whole philosophy real quick. So the left wing, let's say, let's say you have a very liberal advisor. Let's go real quick. Let's talk about this. Maybe we shouldn't, but let's talk about this. So I've had people come to me and say, luke, like, I want to invest in ESG, like, because this is important to me. I want to invest in things that are good for the, like, whatever. Like just socially good. I feel like there, it's more of the woke mentality, right? I'm like, it's probably not going to work out because we don't really, we are, as a fiduciary, we need to make people money. Like, that's our job is to make sure people are able to retire, to make sure they can meet their goals and objectives. Right. So it's interesting, like you said, like the only, the right wing kind of people will own a certain maybe stock, whether or not it makes money or not. They need to have the perception that it's going to make money. So it's interesting that mentality in our industry sometimes that left wing maybe people aren't always looking out to try to do the best for me from a monetary standpoint. They're trying to meet these goals and objectives of these virtual virtue signaling within society. It's very interesting. Off on a tangent, get back to what you were saying. No, I just don't. But DJT, I think after the election, we were talking about this before the stock options trading after the election, I assume are very, very expensive because if Trump wins, DGT probably will double or triple, I assume. If Trump loses, I guarantee this is down like 90%. Yeah, if he loses, it's cooked. If he wins. I don't know. I mean, maybe you've sell the news. It could be a sell the news regardless. It really could. That's why you don't buy that stock. There's no, it is just there because it's there. That's the only thing. But I mean, but look at Gamestop and AMC. Like, didn't they almost like go out of business? Like, like the business, and then they got this influx of money, they paid off some debt and I don't even know if they transformed their companies really well. GameStop has like $20 billion in cash or something. It's like, it has more cash than its market cap. It's insane. That's not so, like, what's happens is these Reddit investors, retail investors, pumped up these stocks and it basically saved these businesses. Because when you pump up a stock and the valuation goes from whatever, 500 million to 10 billion. You can raise a lot of capital by selling stock at that higher valuation, diluting the shares. Right. That's what DJT is doing, is basically diluting the stock. Essentially, every time it pumps up to able to sell shares at a higher valuation, then Trump is able to cash in at higher valuations as well. He's going to be using that for campaign money. He's made more money in DJT. He's worth more in DJT than he's made in real estate his entire life. Yeah. Isn't that crazy? Yeah, that is crazy. But I don't think he's able to monetize it really right now, because if. He cashes it all in, it's going to drive the stock prices zero. Right. So he's got to make sure your system, like, does it, you know, over time. Yeah. So I just think it's a meme stock at this point. Do I wish I got involved? Sure, but. All right, what else you got for us, deon? Yeah, so just a quick update on the election odds, because they are, they're moving drastically on. These are the Vegas odds. Yes. Are not the polls. Yeah, the polls are showing a 50 50 race, but Vegas. Vegas is up to basically, like 61 or 62% win for Trump and 36% to 37% for kamala. And those have really. Kamala Harris had the lead on October 5. She was up by half a percent. So just to show you kind of the drastic swing that's happened, and, you know, I think, honestly, there's a little bit of real data now. There's like, pre, you know, the early vote and starting to get counted, you know, especially in the key battleground states. So, yeah, you know, it's going to be a wild ride here for the next. So I have a relative who is going to vote for Harris, and I asked her why. And she's very Catholic. And, you know, like, there's, I don't. Know how you can be a Catholic. Wild. There is this, that event, that campaign thing where Harris said, somebody in a crowd said, like, you know, Christ is king or Jesus is king or something, and she goes, you're at the wrong rally. Pointed that out to her. And it took her a whole day to come back and says, I would rather still vote for her, being a woman and some other reason, and I'm not voting for a felon. So she supports, I mean, as a Catholic, she supports abortion as well and everything. And I'm like, that's where help me digest this. Cause I've been starting to look at this. I've been trying to figure this out. Is, is he a convicted felon? Wouldn't he be in jail? Weren't they all civil lawsuits or dropped or being appealed? Like, is he a convicted felon? I'm trying to, like, look into this. I can't really, because you just hear, you get into that, you know, the Google machine, and then you just get confused. Yeah, I thought they were all civil cases. That was my understanding. And I thought that all the cases were basically falling apart. Correct. So. And, you know, that doesn't even bring into the fact that, you know, it was kind of a clearly staged very long, you know, I hate to use the term, but witch hunt, that's exactly what it was. Especially the. The real estate case in New York. Yeah. I mean, there's, you know, multiple real estate developers who, you know, testified on tv or whatever that, you know, this is common practice, what's going on here. So you're going to have to arrest everyone if this is what you're arresting him for. So, yeah, people just, you know, that he's. He's a very polarizing figure. Yeah. And there's gonna be people that are, you know, just going to irrationally not vote for him. Yeah. But, yeah, the catholic thing is wild, I thought. So. It's. It really is, you know, it's talk about, you know, someone that doesn't align with your values whatsoever. Like, I'll bring up two things that's happened since October 5 that you said there was a date, that she was kind of ahead. Um, two big interviews happened, 60 minutes, I believe, happened after that. And then also Britain on Fox News. Yep. And both interviews, I think, hopefully some people woke up that she didn't answer a single question, and she just always went back to Trump. Because if you ask, I thought when Tony was said that, I thought Tony wasn't good on the path, what I usually hear is, I just hate Trump. I'm a vote for Harris just because I hate Trump. Yeah, right. And that's the only. And that's kind of what you did say. But, like, that's probably the only reason that most people will vote for Harris. So now you have the Democratic Party and Harris gone these interviews, and they know that's the only thing they have. So they're running with it on all these interviews and saying, oh, I'm only basically what they're saying. I. Only to answer this question. All I know is Trump's a bad person and he's gonna do this worse than I will like, that's exactly every question. What she's basically pivoted to. And I think people are tired of, sick of it. Like, she. She got almost embarrassed on both of those. Oh, and she didn't show up to that one. That one. Dinner in New York City. In New York City. Yeah. Before the. She sent a video. Yeah. I don't know, man. I just. How did we get here? Oh, I know. That's crazy. That is the biggest concern. Not even question, concern I have. I think we all need to think about that deep. Yeah. Yeah. Well, I think Obama came out and said, what happened? Yeah. He asked, what happened? Why are we so divided? Well, I know I can't talk about this on this podcast. It's a different, like, dinner conversation. I went to dinner with somebody last night and let me just say, mind blown conspiracy. I want to talk about every single thing we talked about. But literally, I guess, changed my life. My conversation yesterday changed his life. Oh, wow. But what was the subject matter? Just the history of the United States all the way back to probably. We went back to the civil war and great, great depression and federal reserve. And Lily just. We. He just was on top of his game. And I'm like, everything you're saying makes absolute sense. All right, well, can't wait. So we gotta dig deep on that one. One episode. All right, moving on. Ir's enforcement. Yeah. So I saw Janet Yellen on the old tv yesterday touting IR's enforcement, which is just a nice way of saying, you know, auditing people and crushing them for every technicality that you possibly can just to raise revenue. And some. Some, you know, lovely spending numbers. Essentially, the federal government is running nearly a $2 trillion annual budget deficit. So they're spending $2 trillion more than they have every single year. So what happens is, that's not the government's fault at all. We just need more taxes, more tax dollars, and everyone needs to pay their fair share, and also that won't harm our economy or anything like that. That's essentially what one side is running on right now. But basically, there is essentially a 668 billion tax gap that the IR's is trying to close. Basically, revenue. This is where my head blows up. So we got 80,000 people. Are 80,000 IR's agents. All right, let's say they didn't hit their goal and they're at 60,000 and each one of them makes 100 grand. What is that? That sounds like $600 million. Is that about right? Yeah. Oh, they're chasing 800 for. With 600 million. Good job. Next thing is that, okay, we got a $2 trillion deficit. So now this is where I'm gonna kinda just sidestep the IR's thing, because I just made a, I just came up with the math, and the math doesn't make sense. Hiring all these people, like, so basically everyone that you hired, you're gonna break even chasing down the revenue. Good job. At best. At best, right? So the one thing that Trump is doing, so I'm gonna focus on the $2 trillion deficit that we're running. And one of the things that Trump continues to talk about on his campaign trail are the tax cuts. Like, he wants to make, like, Social Security taxed, exempt. He wants to make tips tax exempt. He wants to, I believe, like mentioned, like firemen and. Yeah, firemen and police officers, like, their pay tax free. I'm like, okay, man, I get it. But holy cow, now you're, you're dipping into, like, half of the tax paying population. Yeah. Social Security, firefighters, like tips, like, who's left? Financial advisors? I don't know. You know, and they're like, somebody did ask him, like, hey, man, you're gonna like, you know, mister Trump, you're gonna, we're gonna be missing all this tax revenue where you're gonna get any set tariffs. I'm gonna go, I'm gonna roll my eyes just slightly on that. What I get what the tariffs can do because we talked about that a couple episodes ago, where it could drive production in the United States to sell more american if we make foreign things more expensive. And then, you know, then you hear people like, well, then you're causing inflation. No, you're just charging more for something. If you want it, you're going to pay more for it. Because if you want to buy american, it's obviously cheaper. Yep. It's not inflationary. It's just, you know, we're handing out, we're doing what the rest of the world does to us. I think we need to go fly an airplane down to Argentina. Go just like, steal Yavier, Gerardo Millet, the president of Argentina, and just put him into office here at the United States. Because what this guy did for Argentina is absolutely, I mean, you guys know who I'm talking about. I mean, he literally went into the government and revamped, like, the whole government did away with, like, I don't know, 60, 70% of everyone, fired half the people, basically, you know, balanced the deficit budget in like, a few days. Yeah, like, well, that's what I know. The United States is a much bigger, complicated economy compared to maybe Argentina. But instead of two days, you could probably do something similar in two months. Like it. That's why Elon Musk is kind of talking about getting on the Trump train, trying to get in there, making more efficient. Again, it has nothing to do with tax collections. It has to do with the mark always talks about on tv, we have a spending problem. Like, that's. That's what it all comes back to. Instead of us focusing on collecting more in taxes and weaponizing taxes for the rich, because, you know, it's always. It's their fault, somebody else's fault. It's. They're not paying their fair share. Instead of doing that, why don't we go get mad at the government and say, you guys are the actual problem. You guys need to stop. If not, we're not going to pay our taxes. Yeah, that's. We fought, again, a revolutionary war over a 1% tea tax. That's. That. That is clearly the whole problem. It's you. And that's why, you know, you can get into political arguments with people. But I will always come back to, the government is too big. The bigger the government gets, the worse off everyone is. Like, it's really pretty. It really boils down to that. And the. It's just like Twitter, right? What did Elon Musk fire? Like, 90% of the workforce, and Twitter is working just fine. That's exactly what needs to happen with basically everything that the government runs is basically 90%, you know, inefficient. Well, isn't that what Elon's gonna do? Come in and. Yeah. And make things efficient? Yeah. I mean, he runs SpaceX at 10,000 people, and NASA's got 40,000 people, and they're stranding astronauts. And Nilan saved a bunch of astronauts or two, you know? Yeah. Right. Got him off. That got him off. SpaceX has done more for then probably NASA's. I mean, okay, we can debate if the moon landing was real. If they actually did the moon landing, then NASA probably did more than SpaceX. But if he didn't, SpaceX did more. Man, can you imagine if, like, Trump doesn't win, what happens to Elon? Holy cow. Like, Tesla, SpaceX, all that stuff's gone. Twitter gone. Right? I don't know. I mean, conspiracy theory, but I. It could be. Why don't we just all get off of social media and live in the moment? Yeah, that's what I say. I'm all for that. Let's just do away with. Delete it right now. Go ahead for it right now. The problem is you guys will want me to keep my social media because it's important in today's business, because sadly, you have to be on there because you have to. That's one thing. It's just like, you have to use things you don't want to use because it's like you have to fit in. You have to do things like. It's frustrating sometimes in this world. Sometimes I just want to be different, but I can't be different if I want to fit in. Yep. All right, one last time. Tony's just like, shut up. I did not say that. All right, some sad news. Denny's just american classic. Really moons over Miami. Oh, yeah. Just good stuff. Grand slam. Oh, yeah. What was that? Eggs, pancakes and bacon. Sausage, if you'd like. There was one, actually. I'm pretty sure it's there. It's on Wilson Mills and right off 271. There used to be at least used to be open 24/7 so I've visited that establishment many times. A long time ago now, but used to live that direction. Yeah. Closing down over 150 stores. You know, setting profitability, I'd say in general over the last four years or so, especially, like, even the local Cleveland restaurant scene, it seems like basically every restaurant has, has flipped over. Any dining experience now is super duper expensive. I probably go out, you know, maybe a third of the time that I used to. Pre 2020, you know, I'd say we went out once a week, honestly. So it's just a much more difficult environment for these businesses. And I think the, like we've talked about kind of the lower end being more expensive hurts it. Right. The, you know, the value establishments used to be a good value. But, you know, the interesting thing is, is that, you know, there's 1500, roughly Denny's. They're closing 10%. Yep. But their sales have declined. Their revenues have declined about 2%. But they still make money. All right. It's narrowing the net income. So they're tightening up their belt. They're not going to just hold, hold on to it. That's fine. Get rid of the 10% of failing restaurants. I wonder what Starbucks is gonna do. Cause Starbucks had a third quarter where they're having declining sales and not with. Anna's pumping money there, I'll tell you that. I don't know, man. Every morning. You want some Starbucks, Luke? No, I don't. Stop spending money. French press, baby. French press. You gotta introduce that man. You gotta save yourself some money. We just had her bridal shower and I think we got a lot of things, but she doesn't use them. Like an espresso machine. Yeah, we got, like, a new coffee machine. We got, like, an ice cream maker. She used that for the first time. Ice cream. Ice. But, I mean, so Denny's is doing this on a, you know, just a slight pullback on numbers. Like, I wonder what something someone like Starbucks does. Yeah. You know, because they're. Do they start closing stores? Is that signs of economic issues? Right. I mean, but maybe people are waking up to not paying $4 for a coffee. Here's my perception. So I'm not, this isn't apply to Starbucks. Applies to Denny's. Denny's is not a place. Even though I grew up where I, when I went to college, Denny's was like, the late night spot. After you were done studying, you went to Denny's. Or maybe you had a couple drinks, whatever it being, and

then by 01:

00 a.m. you wanted some Denny's. Like, that's kind of like the thing we did in college. Right. But outside of that mentality, like, when you, once you grow up, this world we live in now is like you always do. You know me. Pictures. I see people posting. I used to be one of these people. I don't do it now. They pay. So they take a picture of the food they're eating at the restaurants and, like, posting, I don't care what food you're eating at a restaurant. Like, no one cares. That's like a whole. But the reason they do that is because they're like, oh, look, I'm at, like, this fancy steakhouse or, you know, outback back in my hometown. Like, stop getting fancy. Was Olive Garden in my hometown. Right. Stay off social media and you won't see that. Exactly. But my point is with that Denny's the not fit. That Dennis does not fit. Oh, look, I'm at Denny's. Like, I'm rocking. Like, I don't think that fits it. So it's almost like it's. You have your brand almost has to fit into this, like, luxurious perception of, like, something luxury or something vip, unique in this world in some ways. Even though Denny's. I love Denny's bougie. It's true. Yeah. That's why people pay, you know, $2,000 or whatever for a gold plated stuff. Middle class millionaire, out of suitcase with. You know, dry ice. Middle class. Middle class. Everyone's trying to be a middle class millionaire. Mm hmm. All right, well, any, any final words? You can stay a middle class millionaire eating at Denny's, you could. Well, in today's world, a million, 2 million millionaire is middle class. That's the sad part is growing up, it's like million dollars. You're rich now. It's like, just can make retirement. Yeah, right. All right. Well, you know, we'll be staying in tune to a lot of this stuff, obviously, as the election is coming right around the corner. But thanks for listening this week. If you have any questions, comments, show ideas, hit us up at info connect.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.