Capitalist Investor

Inflation, Deepseek AI, and Government Buyouts, Ep. 307

• Strategic Wealth Partners

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Welcome to another insightful episode of "The Capitalist Investor!" This week, our hosts Diamond Hands D, Tony, and Luke, along with guest Mark, delved into a variety of hot topics ranging from chicken prices and egg inflation to AI advancements. Here's a breakdown of the five most compelling discussions:

1. Chicken and Egg Prices: The Inflation Conundrum

The episode kicks off with a lively debate about rising chicken wing and egg prices, which have become astonishingly high post-COVID. Tony reminisces about the days when wings were considered low-class meats, contrasting them with today's luxury prices. The hosts then pivot to discuss the alarming headlines about the Biden administration allegedly having a role in killing 100 million chickens due to bird flu concerns and its impact on egg prices. They explore the relationship between energy prices and grocery costs, with particular disdain for current inflationary policies.

2. Government Employee Buyout: Running Government Like a Business

Another hot topic was the Department of Government Efficiency offering buyouts to federal employees. Diamond Hands D explains how this initiative, spearheaded by Elon and the department, is expected to save roughly $100 million by encouraging 5-10% of the workforce to resign in exchange for eight months of salary. This move is seen as an attempt to run the government more like a business, a notion that has often been suggested but rarely implemented effectively.

3. Economic Growth vs. Government Efficiency: A Deep Dive

Luke brings up an intriguing point about the Trump administration's focus on increasing wages rather than lowering prices. This discussion branches into a consideration of government inefficiency, particularly in departments that may produce little economic value. The hosts debate the idea of how economic policies focused on energy and tariffs could influence net disposable income, drawing a sharp contrast between free-market innovation and public sector stagnation.

4. Historical Context: The JFK Assassination and Economic Policies

Venturing briefly into history and conspiracy, the hosts discuss the JFK assassination's potential connections to contemporary economic policies. Luke wonders if JFK's assassination had anything to do with his desire to get rid of the Federal Reserve and maintain the gold standard. This historical analysis provides some speculative insight into how monumental shifts in U.S. economic policy may have long-standing roots.

5. Deep Seek and AI Innovations: China's Market Disruption

The podcast wraps up with a discussion on AI advancements, particularly focusing on a new chat GPT knockoff from China that claims to be as effective but more cost-efficient. Tony and Luke express concerns about the potential inefficiency in the corporate sector, evident from Nvidia's stock reaction to the news. This segment highlights the vulnerability of tech stocks to rapid valuation changes based on international developments and the necessity of a diversified investment strategy.

Conclusion

This week's episode of "The Capitalist Investor" covered multiple topics of great relevance, from market inflation concerns to government inefficiency and historical economic shifts. The discussion on AI innovations underscores the rapid technological changes shaping current investment landscapes. For a deeper dive into these topics, tune into the full episode and stay informed on how these issues could impact your investments.

Feel free to send any questions, comments, or show ideas to infowpconnect.com, and we'll catch you next week with more insights!

Hello and welcome to this week's episode of the Capitalist Investor. As always, you have me, diamondhands D. And we got the whole crew here today. Tony the Tiger, Cool Hand Luke. What's going on, guys? What's up? Well, after a, you know, pretty fast paced start to the year with the new administration and all that stuff, we covered that pretty good last week. Got some. Got some good topics to talk about this week as well. So in no particular order, you know, we'll talk a little AI deep seek all that good stuff. We'll talk about one of my favorite topics, the. The fork in the road for the government employees and chicken and egg prices. So we'll get into that. That, that popped up this week again, so. So yeah, maybe we'll start with that one. Guys, you want to talk a little chicken and egg? Yeah. Which came first? We still don't know. So when you go to the. When you get wings, are you, are you a flats or are you a drum guy? I like the variety. Oh, okay. I don't, I don't necessarily discriminate. I discriminate. Yeah. I definitely am a drum. Yeah. Kind of guy. I want to drum. It's just easy to eat. Moving on. Seems like there's more meat. Yeah, agreed. Yeah. But, but I will say though, like, growing up like wings have in Buffalo Wild Wings, I think really was like the starting point of when wings became less of a. More of a luxury. Like it used to be. Like that was the worst kind of part of, you know, the meats of the world. Like they were the lowest kind of class kind of meats. And now it's like you're paying A$20 a wing when you go out. Ridiculous. I remember it was like 20, 20 cent wing nights growing up, like something. Like that right after Covid and people started going to restaurants again and stuff like that. That's where I went to like a Quaker steak and lube. And looking at the wing prices, I thought I was at a fine dining restaurant because it's like chicken wings was market price. Yeah. I'm like, what am I buying? A lobster. Lobster. And you're not going to eat five or 10 wings when you're like big guys like us, like, you're not going to eat five or ten. 20, like that's usually a meal for me is 20 wings. Wow. And if you're $1.20 a wing, like that's 25 bucks. That is a steak. It's steak at Longhorn. Yeah. That's the filet. Yeah. Yeah. I actually Tony sent me a picture of a barbecue sandwich a couple weeks ago. So Michael Simon's place closed by my house. There's still Maples downtown, but I used to have one right on Sugar and Boulevard there. Anyway, I went to look at City Barbecue, which is actually pretty good, even though it's a chain. And, yeah, I was browsing through the. The menu. It was, I think, 10 wings for like, 1850 or something like that. Are they gonna say, oh, because you get the flat and the drum. Great, thanks. But now egg prices are, what, like, four or five bucks? So the. The thing that sparked this whole thing, like, you know, Derek, you sent this over. Egg prices. And I'm like, you know, and the headline says, the Biden administration killed a hundred chickens. 100 million. I'm sorry, 100 million. Got a couple zeros. And I'm like, that is a very substantial amount of chickens, I'd imagine. But, like, it's. It's an. It's a clickbait, you know, like, oh, my God, they killed that many chickens. Like, that's in. Seems like a lot, but I don't know how many chickens are in. In circulation. I don't know what you want to call it. Circulation. I don't know what you call alive. But, I mean. So, like, my immediate thing is, I'm like, you can't just base whatever. Whatever assumption you're about to make off that statement, because what if they killed those to prevent, like, bird flu? So, like. But really, what sparked, like, what really got me thinking when I read that article was, like, recently, J.D. vance has been on a couple of, you know, weekend shows getting interviewed, getting yelled at, whatever you want to call it, and he's just getting blasted. And they're like, hey, you guys have been in office for a week now, and prices are actually still going up. I mean, like, I just want to shake people at that point. Like, reach through the screen and shake somebody, and it just really comes down. The reason that, you know, Trump and his whole administration is saying, we're gonna. We're gonna take hold in lower prices, inflation, things like that is energy. Because with energy, we can get the eggs to the store cheaper because fuel is cheaper. But what did Biden come and do on January 6th? He goes in and bans offshore drilling right as he's leaving office. Why didn't you do that on day one four years ago? So it's a setup, in my opinion. Yeah. So, no, I don't know about you guys. And. And frankly, I don't do most of the Grocery shopping, I just look at the credit card statement that my wife has, and now I, it, like, pisses me off a little bit while looking at it. But anyway, the grocery store, when I do go, I don't look at the price of eggs. I look at the final dollar amount when I check out. And I think that's how a lot of people are. Like, no one actually cares if eggs are$4 or $3. I don't think, like, they care that their grocery costs are maybe not $400 an hour, $300 or$200. Right. But the, the problem is the average person that hears these political statements that just doesn't care about the financial world or how things like in economics and that kind of thing. Like, when you tell them that the prices are going to go down, what are they going to believe? They're going to believe that prices are going to go down, but you don't want prices to go down. That's deflation. You want prices to basically don't go up. So when, you know, Trump is talking about prices decreasing, like, the people aren't going to actually feel that difference, you know, cool. You go to gas station, instead of paying 35 bucks, you're paying 30 bucks. But the aggregate amount you're spending probably is not going to change. So, so this is where my mind then went after thinking about this whole energy thing, and I'm like, all right, everyone thinks that these tariffs are inflationary, which they probably are, because everything around you is going to go up because they're trying to capture more revenue dollars for the government. But let's think about that. So we slap on some tariffs and let's say Prices go up 10%, 15%. That's a lot. However, the reason he wants to do the tariffs is so that he can lower taxes. So what if I said everything around you is going to go up 10 to 15%, but you don't have to pay any more taxes, that will put 20 to 25% more money into your pocket. It actually would be more beneficial how most people aren't spending. Well, some people are, but you're not spending every single dollar you make, hopefully. So the actual tax savings will be more than what you're coming out of pocket to spend at the grocery store, whatever it be. Now, the other thing is, I think about a lot when it comes to prices and kind of what's going on is, you know, the Trump administration doesn't necessarily want prices to, to go down. They want, they want things again to be stable. There's A point there I was trying to make that my brain. I just had a brain fart. But we'll get back into that. Deflate. There's nothing good with deflation. Yeah, I know that. There was another big talking point I had, but we'll get it. Well, deflation essentially would mean that there's a high. There's high supply and low demand. And if we are in that situation, we are not buying stuff. That means people don't maybe have jobs or money's tight or somebody in the household lost their job or something along them lines. That's. That's where my mind immediately goes. But. And I'll start. It all started with chickens, dude. It all started with chickens. All started with chickens, so. All right, D. You have anything to add or subtract? Nothing to subtract. Okay, yeah, let's go. Let's go to the next one, the fork in the road. So if you didn't see it, Elon and the Department of Government Efficiency basically sent out an email to all federal employees, basically offering a buyout. So it was roughly eight months of salary. So basically, you can resign today, get paid through September, and they basically expect 5 to 10% of the workforce to quit, ultimately saving about 100 million bucks, is the numbers that I read. Obviously, those are, excuse me, all estimates, but I thought it was a very important moment in time, because my whole entire life, you know, you heard, like, even when you're a kid, like, you heard adults say, like, the government should be run like a business. Right. And I think this is really the first time where the government, they're actually attempting to run it like a business. Go ahead. So this goes along, actually with the point. I just remember the point I was trying to get to earlier. And this goes along with it. Trump administration doesn't want prices to necessarily go down. They want wages to go up. Right. Because that's the same exact thing as essentially prices going down in the private markets. They want wages to go up. When it comes to the government, though, they really, like, as an aggregate, they don't want wages to go up. They want people to actually earn the productivity that they're worth within the government. Right. And a lot of government entities don't actually produce any kind of economic growth. I mean, that at all. Right. Measure. And how much is a need? How much. How many of these departments are needed? I mean, at the end of the day, right. And. All right, so, like, look at, again, like, kind of going on to that. It's. Free market innovation is a lot more advanced Just look at Elon, right? He launched rockets, plucking them out of the air with a third of the staff that NASA has. Right. That's just one case in point. Like, how much more efficient is this? And you know, with this juicy offer of getting a resignation for eight months out in September, right? Like, hey, just send me an email that says resign and you'll get eight months severance right now. That and then also to slap on saying, hey, if you don't do that, I can't guarantee your job will be here when the things shake out. Right? Yep. But so like, you know, when you run a private business, Tony, when you Mark, you know, everyone here, like, has somebody that's not doing what they're supposed to be doing or whatever it be or technically is a big drag on revenue. It hurts your bottom line. Like, you got to get rid of that person. Right. So, I mean, when you're in the government, what's the incentive to get rid of somebody that you're the boss of? So it doesn't impact your bottom line because it's not a business. I mean, there's no incentive for anyone to ever get fired. So everyone just slacks off. And I'm not just saying that, like to. That's not like I'm ignorant to how the public sector works. I have. And I hopefully my friends aren't listening. I have friends that work in the public sector and they tell me how much they slack off. I mean, it's. Why do we try so hard? I mean, seriously, why do we try so hard when everyone can collect a paycheck doing nothing. Yeah, well, and have a fat pension. Again, man, I don't think people really realize. I mean, I think I saw something else. The new press secretary, she's a, She's a pit bull. Just like I would. Just like you would imagine, it's like the last several. In the last. Last time Trump was in there. But he goes, yeah, we actually, you know, the Doge actually stopped. Like, what is it, like 25 million going. Going to the WHO. Yeah. The World Health Organization. And then also stopping $50 million in condoms going to Gaza. Is that right? And they're like, there's only 2 million people there. Yep. Like, everyone's getting 25 bucks worth of condoms. Like, what the hell, man? It's. It's where is like, it has to be some type of money laundering. I've always said that, you know, it's on account. Hey, we're going to send you billions of dollars and you don't need to Account for anything. Yeah, and I'm going to dig a. Hole and bury do. I'm literally going to dig a hole and bury dollars in a bunker. I mean, think about that last part. Like the, the Trump administration is in office and they tried to do this while he's in office. So they tried to send money to the who after he said we're out of the who. Right. And he's currently president. Like what, what was going on over the last four years. You really have to ask yourself where all this money was going and how much. Weren't they testing brats on cocaine or something? Like a three million dollar study that's. Yours and AI's money, money laundering and stuff like that gets very difficult if you go back to the gold standard because every dollar has to be accounted for. Because you have a dollar being backed by gold, you actually have physical gold accounting for every dollar that's out there. You know, one thing I thought about, and I haven't done much research, and I hate to even bring it up, but you know, with RFK now and off, you know, kind of running some stuff in, in the administration, you know, I started doing some research on like the JFK assassination. And I think now he just, like Trump just released some of the files or they're coming out soon about the assassination. I said that. I'm still been talking, I mean they've been talking about that for 20 years. Don't you find it interesting that he was assassinated in 63 and then eight years later we got off the gold standard? Officially, Nixon did. I don't know, it's kind of, I don't know. Was there something weird there? I wonder if he was looking back in history. I wonder if he had anything to do with like jfk, like wanting to stay on the gold standard. And we wanted to change things because the bigger the, the economic growth that we've seen basically in 50 years, technology has allowed us to grow a lot economically. But really getting off the gold standard sparked all the growth in technology because allowed us to print a bunch of money, allowed the Federal Reserve do a bunch of stuff. So it all goes back to the gold standard, allowing all this stuff to happen to let the government get bigger. So ever since 71, essentially politicians have had more control over us. I believe JFK wanted, he wanted to get rid of the Federal Reserve. That's what I say that too. So maybe I have a bullet coming from my head. Yeah, he wanted to get rid of, rid of that. He wanted to get rid of the CIA because they Were clearly strong, arming him into trying to get into conflicts. You know, the. The Cuban missile crisis. It was jfk who, like, literally everyone else was telling him, like, we need to go to war. And he was the only one that. That stopped that. Him and his brother, basically. So. So, yeah, both got assassinated. Exactly. I don't know, man. The CIA comes. If it comes out, like, some weird. Stuff like the CIA, like, I, I. How are we gonna. We're not getting. Like. You're not getting that those files are destroyed. Exactly. They're not sitting in a vault somewhere. Like, oh, yeah, we killed the President. Here are all the files. Hey, the power's out. Oh, man. Like, yeah, like, somebody's wearing some. Some, you know, glow. What is that, like the night goggles? Like, I mean, come on, man. Like that. That shit's gone. Yeah. Anyway, Mark Tepper here from SWP Investment Management. It's time to elevate your portfolio with the SWP Growth and Income etf, a diversified bas. Quality growth. Companies that pay dividends. SWP stands out from the pack because total returns matter. Don't just Invest. Thrive with SWP. Visit investswp.com for more information. Disclosures apply. All right, Deep seek and AI. Big, big development over the weekend. What is it? Essentially, a. Somebody came out with a chat GPT kind of knockoff that was claimed to be older technology cost less money, so less energy, less people. Old technology, and it's as good as chat GPT. I'm still trying to, like, see how this is shaken out, because you got everyone saying, oh, like, you know, China, blah, blah, blah. I'm like, you know, here's the one thing. We're trying to get rid of TikTok because they're spying on us. The Chinese are. What do you think this is? This is even worse. That was, like, taking pictures of people doing dances. And what are you gonna get out of that? What are you gonna get out of a TikTok video? Nothing. Like new dance moves. Good job, China. This one's different, in my opinion. So the question we need to answer is, is someone lying? Is this true? I mean, like, what's actually going on behind the scenes? Okay, let's go through those two. Scenari is true. This shows you how inefficient we talk about how inefficient the public sector is. Well, their corporate sector needs some efficiency going on too, because, you know, if we're spending billions of dollars and we don't need to on a bunch of bull crap that we're developing, people aren't doing their damn job. Imagine, hey guys, like let's just make this sound really expensive and you know, like, let's check up the prices. And then you get some independent arm. They're not even publicly really traded. Right? Like, I mean, this is like the. Whole kind of college scrappiness. Like if you have a college interview in a college dorm room trying to start up a company like the old technology firms in the 90s, like you're being scrappy. You're trying to use every single resource. When you get fat and happy as a trillion dollar corporation, you throw a couple billion dollars everywhere like it's nothing because it doesn't mean anything to the bottom line anymore. So again, this comes back to the big corporations being inefficient. That's a possibility. Now the other problem is if this is if they're lying and stuff, what also is the concern to me is that this one little headline out of China causing Nvidia to trade like a penny stock. That's concerning too. That shows you kind of how frothy things still are in the market. When you have a 3.6 trillion dollar company lose 700, 700 billion dollars in one day off of a headline that's not verified necessarily out of China. That's concerning. Yep. So both are kind of concerning. It's frothy. I mean, that's immediately what I thought. I'm like, man, you let the, you let the air out of this. And you know, Nate, our cio, you know, he always told me he goes, you know, stocks go down a lot faster than they go up. And that was very, you know, that was very apparent on. I've had a lot of client review meetings the past week and I've only had two now or three ever since the Deepseek news. But I think this verifies my whole thinking that, you know, our growth and income strategy that we have here has a lot of kind of money outside of the tech names, like a lot of the smaller names or the more value oriented names. And you know, after the election, the week after the election, you saw that strategy do amazing. And then you kind of saw a rotation back to big tech in December and then ever since, basically January, especially on the deep seat day when you saw technology sell off, you actually had a lot of those value stocks up. So like our strategy was basically flat on that day when, you know, everything was down 3%. Right. Or the NASDAQ was down 3%. So I think this is showing you that 25 is going to be the year of everything else. And I've gone out on a limb personally. I know our team here agrees for the most part there's some things they agree with, with technology and adding some technology too. But me personally, I think this year is going to be the year of everything else. And I've gone out a limb and talked about it for two months. I think the RSP, the equal weight s P500 actually is going to outperform the cap weighted s P500 with a big tech being the main holdings in there. I've always. I. When I talk to clients, I say one thing. I'm like, when you have basically two years of seven to 10 stocks carry the index 70%. The third year, one of two things happen. Everything else catches up or the top comes down, those 10 stocks will come down and everything will stay the same or everything just catches up. And we just watched that. The top ten came down. Yep. And everything else stayed fine. There were stocks going, there were still stocks up that day even though the market was down 3% because it's all the steam coming out of the last two years. And that's okay. Things need to breathe anyway. But it'll be interesting as this evolves. The rest of the week you have. The tech stocks trading like 28 times future earnings, and that's usually that 16 times. Then you have everything else trading like 12 times. So it's like I did see that the top 10 stocks, when you take a look at their PE ratios, is around 30. Yeah. The, the average, the S P is like 16 and a half. So you can tell how expensive those are compared to the other 490 stocks. Which I was trading, I think below the average. So it's like, it's. It's kind of interesting to think about. Yep. So it, it also shows you that how fast news travels these days because they. People were selling that stock off before anyone even knew what was. The Nvidia. Nvidia. That is before anyone even knew what was going on. And you have all these betting markets now with, you know, whatever with, you know, will this happen? Will that happen? And just the news going up and down constantly. It is. It's a good reminder exactly what Luke said, that you need to have a strategy and you need to understand that these things happen frequently now and you need to, you need to be prepared to ride some of those volatility storms because they're going to be fast and furious. I'm glad this happened, though. I've brought on, I think, two clients the past that were all in Nvidia. I'm saying I brought two clients that were 100% of their portfolio in Nvidia. Oh, my God, like the past, like, three months. I'm glad this happened because we executed the strategy obviously before this happened, but they were of the mindset coming in that, like, Nvidia would just go up forever, right? Like this thought this would be like the chain changer for the next 10 years. It's going to become a $10 trillion company. But, like, I actually have a review meeting with someone today that was of that mindset. And, you know, I'm glad this happened to kind of say, hey, like, this is why we diversify. This is why a $3.6 trillion company can't just become $6 trillion very quickly because it's got a lot of money behind it already. You know, wonderful company, but people need to do some math every once in. A while and not have 100% their money in it. Exactly. All right, boys, well, good, Good talk today. Thanks for listening out there. If you guys have any questions or comments or show ideas, hit us up@infowpconnect.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.