Webinar Replay: Why this isn’t a “Buy Everything” Market Anymore

Okay, we're going to go ahead and get started again. Thank you for everyone for, for logging in and joining us today. My name is Freddie Garcia, as most of you know, and with me today is Noel Langford, our Chief Investment Officer and CEO of LeftBrain, and also Brian Dress, Registered Investment Advisor. And head of our investment research. So on the screen right now, um, just a quick shout out for an event that we have coming up. Um, we'll talk a little bit more about that at the end of the presentation because we have another event that we're going to spotlight as well. But along with investments, we also do holistic planning and want to make sure everything is covered. So we're going to be doing an estate planning seminar luncheon for our existing clients, uh, coming up on April 18th. So you will be getting an email and a tax, and which you can register. And we'll go over on that seminar again strategies to protect and transfer your wealth, tax considerations, the role of corporate trustees. And we're going to have a panel of specialists— an estate planning attorney, a CPA, and a trust and estate planning specialist, and insurance planning specialist on there. So it is a luncheon at Morin Steakhouse in Naperville on a Saturday. Uh, space is limited, so make sure when you get the invite to, uh, to RSVP right away. So again Today we're going to be talking about though is investments. And, you know, I was telling Nolan and Brian earlier today, market was up today, so I think we're good and there's nothing to talk about. But they said, nope, not quite yet, because we are cautiously optimistic. And when we have days like today, it lets you know that there's still some opportunity out there. But we do have to be careful. And there are trends out there that we are seeing. So that's what we're going to talk about today. So the next phase of market and megatrends and income opportunities, we are always looking for opportunities out there. Because as you know, we are dynamic and we do make changes and we do adjust.

But we're going to talk about what is that we're seeing.

And again, the questions that we've been getting from, from, from you as well, our clients, because again, we are always mindful of what matters to you and we try to align what's going on in the market. So here's what we've been noticing is the questions that have been coming in. Is this start of something bigger, either in the good or the bad? Today we saw a really good day. So hopefully that's a good trend that continues. We're not sure yet, but we're hoping so. Uh, should we be reducing risk? Well, again, we have to be careful because again, in days like today, if you reduce too much risk, you miss those big up days and they do happen. We saw that today. How should we think about geopolitical events like what's going on in Iran? Should investors be playing offense or defense? And what should we be doing right now? As you know, we've made some changes already. We've made some additional changes again, not too long ago, and there's possible more changes that we'll be making. So we're going to talk about all of that today. There's going to be opportunity for you to ask questions. We always appreciate questions. So on the bottom of your screen, uh, there is a Q&A section. So if you have a question throughout this presentation, please feel free to enter it in there. If it is a private question, you can mark that as well, and I will get back to and answer that personally. Or you can enter it in there and we'll answer at the end of the presentation. Or if you'd like to make an appointment afterwards, again, we can do that as well. So to kick it off, I'm going to send it over to Brian Dress, the head of our investment research. And he's going to talk about what's changed and what matters the most right now.

Thank you, Freddie. And I want to say thank you to everyone for being with us today. We appreciate your trust and we're happy, happy to be with you and help you understand what we're seeing in the markets. Tell you a little bit more about our, our actions in today's environment. So taking a step back from the headlines, there's clearly a lot of noise in the market right now between volatility, interest rates moving and geopolitical headlines. It's an environment that can feel really uncertain. But when we step back and look at it objectively, markets aren't breaking, they're evolving. What's changing is that leadership is shifting and outcomes are becoming much more dependent on how investors approach the market. This is no longer a buy everything environment. Selectivity really matters. And while that shift can feel uncomfortable, it's also where opportunity starts to emerge. And from a research standpoint, nothing's really changed too much. From our standpoint, we're continuing to see strong underlying demand tied to long-term needs, particularly around data infrastructure and connectivity. In fact, this, this week we just received a report from our analyst Madhu Chowdhury that reinforced that AI hardware trends are still very much intact. And so despite everything that's happening on the surface, the underlying fundamentals in many areas of the market remain quite strong. And if anything, we're— what we're seeing right now is that this environment is actually creating more opportunities and not fewer. As rates have moved, there are now more options available both across both growth and especially in income securities. Especially for income-focused investors who may have capital sitting on the sidelines. This has become a much more favorable environment than it has been in quite some time. So with that as a backdrop, I want to bring in our CEO and Chief Investment Officer, Nolan Langford. Nolan, first question: when you step back from the headlines, what is actually driving the market right now?

A lot of emotion, a lot of sentiment. Um, I break it into two things. So we have some macro trends And then we have micro trends. On the macroeconomic front, you know, I know a lot of people would think about what's happening in Iran and the war and the campaign that started February 28th. But actually we've seen these macro trends evolve over the last several months. And I think there's a few issues at work. One is, you know, the economic strength has been pretty strong. We've got a strong GDP print. But I think jobs are an issue. Jobs have been an issue. And I think as we still think about, is AI friend or foe? I think people are trying to put two and two together and see if AI will cause us some pain in the job department. Clearly, since the war broke out, oil is at the top of people's mind. Oil is a really big issue because, you know, oil prices, if they stay elevated a while, can leak into cost, which leaks into inflation. And inflation's a really big deal because if inflation stays high and sticky, it leads to the other I, which are interest rates. And interest rates really drive everything that we do from an investment standpoint. It wasn't that long ago where we were pretty certain that rates were going lower, especially after President Trump nominated Kevin Warsh to lead the Fed. His mandate was to get rates lower, and the market had priced in a few rate cuts toward the end of this year. But that has totally been reversed since the February 28th campaign started. And now we have equal probabilities of rates rising later this year as we do them falling. And this clearly is not good news for the housing market, which really needs a shot in the arm and not a kick in the butt. And so we'll be watching those macro trends because, um, that's a really big deal. Now, as a firm, there's not anything that we can do to control the macro. In a lot of cases, the macro environment is unpredictable. So we don't focus a lot of our time and attention there. Where we really start try to focus on is picking winners, which means that we really need to pay attention to the micro level, business level detail of what's happening. And I think that's more interesting because the micro trends really have predated the war. I think we can go back to Q4 last year and there was a rotation that, that really start really started. And at first we said, hey, the macro trend— the micro trends were broadening kind of away from the big Mag 7 into other areas like small caps and internationals and just other areas which had been starved for the prior few years. And that's generally pretty healthy because bull markets can continue to grow with that sort of action. But we've also seen, um, some other trends that leave us scratching our head a little bit and leaves us more optimistic intermediate term, and that is earnings. We pay a lot of attention to the 4 quarterly earning releases we get. And when earnings were released for the Q4, which just happened, very impressive, very strong earnings. What's more important in the earnings releases is the commentary coming from CEOs. Very strong. CEOs are generally a more conservative, cautiously optimistic bunch. But in a lot of cases, in a lot of sectors, they couldn't hold their optimism. Surprisingly, though, stock prices didn't follow through commentary. And so you've got really good earnings releases, but investors kind of sold the news. So that was one of the things that markets hadn't been responding to earnings. And again, this predates what's happening in Iran. The other thing I mentioned about the, the AI story, we're going to talk a little bit more about this throughout the presentation. But there are definitely AI winners and losers. Thing is, at this point, it's so early, we don't have a strong grasp on who the exact winners will be. I remind you, in the first tech bull market, Tech Boom 1.0 from 1995 to 2000, basically was internet-driven. But, you know, AOL and Netscape, who kicked off that revolution, they didn't— they weren't the winners. The winners didn't come to much, much later. And so AI is kind of at that stage as well, where the market's really kind of not placing concentrated bets because we don't know how it's going to end. But we do know there has definitely been some AI losers already, primarily in the software space, because every time one of these AI LLM providers renew, um, release a new release, there's some sector of our economy that gets hit. Even if their revenues don't go down, their stock prices do. So those are the issues we're contending with on the micro level, and, um, excited to talk in more detail as we go through the presentation.

Thanks, Nolan, for getting us started. Plenty to discuss today, and I'm going to just kind of lead you through and get as much of your information and knowledge to our clients and our friends as we can. So we want to dig deeper on a number of the issues that you just discussed in, in the preamble there. Plenty to discuss in terms of AI winners and losers. We want to talk about income opportunities and some of the things we're seeing. And then most importantly, in a volatile and challenging time, some of the best ways that we think make sense to respond to the market and how we're responding to the market as investors and as advisors. So, Nolan, with all the issues you just mentioned as a backdrop, I think it would be helpful, first of all, if we could walk our attendees through what investment moves generally make sense in this environment and which don't. So, let's start with the former. What type of investment reactions do make sense in today's environment?

So the old adage on Wall Street is buy if you can, hold if you can't. I think what makes sense is sticking to the plan. You know, generally every investor on this call is probably a client or a friend of the firm, and everybody should have some sort of plan in place. There's nothing happened today that should abandon the plan. So I think if somebody's, you know, investing for growth and they're creating wealth or building wealth investor, I think it's a really good environment. Prices are cheaper today than they have been in a while. And so we need to kind of look through this quarter and pay attention to what we'd like things to look like 18, 24 months from now. So I don't think we need to forget last year was not that dissimilar to this year. Through Liberation Day, April 2nd, things looked not good at all, and things bounced back quite nicely. Same thing with the first quarter of 2023. We had that mini banking crisis with Silicon Valley Bank went under, and the market assumed that we had another great financial crisis on our hands that would spread. And since— and then the market bounced back nicely. So this is the third year in a row where we had a rough first quarter. Unfortunately, this time it's surrounded by, you know, talk of war, and I should be remiss for not saying this sooner, but our hearts and thoughts and prayers go out to all of our service members who are on the front line in this conflict. So I understand it's distressing, especially for those that are retired and sitting back watching the news all day every day with information and misinformation can make you think differently about things, but if you think dispassionately about it and take a step back, You definitely want to buy, find investments that work. In most of our investments, we're not spending the money today. So we want something that works over time. And unfortunately, the markets don't go straight up. Sometimes they zig and zag, sometimes it's a seesaw. So I think what makes sense is buying good things. We define good things as businesses that have revenue growth that's durable and businesses that are also making money. And we want to find businesses that are making more money 3 to 4 or 5 years from now than they are today, because ultimately you'll do well if you own them. So I think that's what continues to make sense.

Thank you, Nolan. And we're going to talk about a couple of investment ideas that we think make sense and also some sectors and where we think there are some winners and some losers and kind of distill for you kind of what we think based on what we've seen over the last few months. Of not only what we've seen in terms of stock prices, but also fundamental data, most importantly. Noland, sometimes the biggest problem in difficult situations or difficult markets like this is that emotions can get the better of us, and we can make mistakes as investors that cost us a lot down the line. And so, the second question I want to ask you is following up what you just said about in terms of what we want to do from a positive point of view, What are some of the mistakes that you want to caution investors to avoid out there?

Generally, when the markets are bad like they are now, I think emotionally we all think, you know, maybe I should sell because like Freddie said in the opening, is this the start of something worse? And unfortunately, we don't have the answers to that. There's a bunch of unknowns in the market today, headline-driven. Politically coming out of Washington, the war, interest rates, inflation, the list goes on and on and on. But if you're an investor, by definition, you're an optimist. And whatever issues we have, we're going to get through them. Going to cash has never worked for people. Um, the problem is you can be right short-term, but the markets tend to turn on a dime. And so with complete precision, If we could sell at the top and then get in right before the market went back up, going to cash would be a legitimate strategy. But it's absolutely impossible to do in big days like today, come out of nowhere when things look worse. And so that's just generally not a long-term strategy. If you have some short-term funding need, hey, you're buying a house in 3 months, you need the money for a home renovation, you're taking a trip around the world, then yes, that should be money that you should have in cash. But for any investor that, you know, is investing for a longer period, and even retirees are investing over the course of their life expectancy, you want a balanced portfolio. But it's really hard, it's impossible to time the market. You should have some cash just based off of your allocation. But we shouldn't be selling stocks now when they're low and going to cash just because we're scared of the headlines. That is not a winning strategy.

Thanks, Nolan. I think it does make sense to certainly do a gut check and make sure what you've got in place makes sense for you and for your situation. But just reacting to the news based on the headlines doesn't make a whole lot of sense from that standpoint. Nolan, sometimes we talk, almost always we talk in the office here about what's working and what's not working. So, with everything you've mentioned kind of in the background, I want to talk about just the simple question. First of all, what's working in the market?

So, if you just look at prices and you look at prices year to date, and especially month to date, it looks like not much is working. You know, people could have put their money in Treasuries or in gold, and even that has been a losing strategy this month. And I know that may lead to despair. For a lot of people, but it actually shouldn't. That tells you the market right now is not distinguishing winners from losers, and there is the opportunity. Like we've always said, you either get good news or cheap prices, but you're not going to get them both. And so there's not a lot working. Energy obviously is working because of what's happening in Iran. So energy and energy stocks continue to set new highs. So do chemicals, and so do fertilizers. But that's all based off of temporary situation, based off of the Straits of Hormuz being closed. So that's from a price standpoint. But if you look at a business condition standpoint, what's working, there's a lot that's working. One, the consumer, you know, coming through earnings, I was really surprised, pleasantly so, to see how well the consumer is holding up. There's some restaurant stocks that surprised us on the upside. Travel stocks have been really, really strong. And even just consumer discretionary, you know, Five Below, the dollar stores, Walmart, Costco, there's been a lot to like with the consumer. That's working. Industrials are working. You know, we're in the fourth industrial revolution. AI is powering things, and for AI you need chips. Those chips run hot. In order to power chips, you actually need energy. And so we're fortifying the energy grid. And one of the constraints to data center buildout for AI is power. And that leads us into the industrials. So the power sector's working, the industrial sector's working, especially as we continue to reshore. And then in technology, there's a lot that's working. And I know we say AI and it seems like, oh, well, that's just AI, but the AI spend right now is like $5 trillion. And the estimates continue to go up. and they go up meaningfully. And so just that one sector just has knock-on effects to other sectors. And so it's not just chips. Now you need packaging. Now you need cooling for data centers. We talked about the power. And so it actually steamrolls into a lot of other sectors. So there's actually a lot that is working right now.

Yeah, I think it's— It's easy to look at the price of stocks and think almost nothing's working, but we want to distinguish between what's happening from a stock price point of view and what we want to talk about from a fundamental business point of view. Certainly, some of the themes that you mentioned are working from a business point of view, and that's likely to work out in terms of a stock price point of view over the medium and long term. That's something that we want to flesh out as we move on further on today. Let's see the flip side of that, Nolan. What's not working? Talk about some of the areas of the market that we think are worth avoiding or sort of underweighting.

So here's what's interesting. There's a few areas that really have been in the penalty box. One is software. You know, there's a narrative, there's a SaaS-pocalypse right now that AI is eating software. And so the idea there is AI can write its own code, AI can do a lot of things, and that it's going to displace software, the seat-based licensing from software. So that narrative is out there. They're not working right now. The other sector that's not working is the credit markets, and this talk about private credit. So generally these private equity firms do take privates where there's some public company or some big company Private equity goes in, they do a buyout, they may put, I don't know, 20 or 30% equity into the deal and the rest they borrow. They don't borrow them from traditional banks, it's usually these private creditor lenders. So people like Apollo, Blackstone, Carlyle, Blue Isle, they will actually lend the money to fund the rest of the buyouts. And so there's a large proportion of software buyouts that were purchased by private equity. They love software because It's recurring revenue, low CapEx expenses. And so they put debt on these companies, and it's usually these private firms that fund them. Well, there were a couple of defaults last year. Tricolor was one of them, which was a subprime lender. And after Oracle in October came out and said they were going to build a data center and Blue Owl was going to fund it with all this debt, the market got heartburn. And since then, private credit and private credit lending, specifically to software, has been in the penalty box as well. And it's had wide ramifications, not just in private credit, but throughout all of financial. So even if you look now, all the banks are down this year, even the really good ones like JPMorgan Chase. And so those sectors right now are in the penalty box.

Okay, let's move forward and talk about in a little bit more detail some of the growth trends that we're seeing and we continue to feel, again, cautiously optimistic about. So, let's talk about what's not changing. So, again, stock prices are volatile. That's what volatility is in the short term. But we think it's important to distinguish between what's happening in terms of stock prices and what's happening at the business fundamental level. So, we want to talk about what really hasn't changed. We have 4 major themes that we've been talking to you guys about for a number of years here. They continue to roll forward in terms of business fundamentals, profits, revenues, growth, and everything along those lines. So I want to talk more about that, Nolan, and let's talk about some of those businesses that we think continue to work in this environment. So let's talk about some of these secular trends. Um, we think some of these long-term drivers of growth remain intact. Talk to us a little bit about how you're viewing those, and then we'll talk about the 4 themes individually once you get through that.

So the secular trends that we've been talking about, there's, um, there's really 4 of them: AI, cybersecurity, what's going on in the data center, and fintech, which is financial technology, to which I'm going to add 2, Brian. Robotics is another big area of growth, a secular growing area. We haven't talked a lot about, but we should because they're starting to show up on our radar screen. And the other one is what's happening in space. And so we haven't talked a lot about that, but it's going to become a lot more front and center. SpaceX is going to do its IPO later this year. And so a lot of this data center buildout that we're talking about, the next frontier is going to be building the data centers in space where you don't have a power consumption issue, you don't have to worry about cooling. And it's just going to be much cheaper to do computing there. So the trends for the Fourth Industrial Revolution for those both, all of these sectors are still intact. I would say 3 out of the 4, you're still getting acceleration, and 1 out of the 4, you're getting unbelievable acceleration. That's in AI and the AI buildout. It's unbelievable even through last week. To hear these CEOs of these, anybody involved in the AI ecosystem, the CEOs themselves not only reporting acceleration and an extension of demand, but being surprised by it. And you're hearing things like, "Never in my career." So that's still with us. Cybersecurity is the other one. And interestingly, you know, prior to the Iran war breaking out, the cybersecurity sector You're still seeing all these growth drivers. And ironically, when AI enters the scene, you have an opportunity for more threats, worse threats, better threats, and more threats. You know, we're getting to the point where we're getting agentic AI. We're going from just putting some notes in ChatGPT and having it spit out a document to now we're having agents work on our behalf. And so you can have agent-to-agent communication. And so what that means from a cybersecurity standpoint, you've got a lot more to secure and you've got a lot more agents in particular vulnerabilities, like millions more. And so that should drive— it's actually driving cybersecurity spending. But prior to Iran breaking out, these cybersecurity stocks were trading along with software stocks as if they were going to be AI losers. The other area is data centers. Data centers are still growing right along with traditional AI. And a lot of companies, before they can do AI, they have to digitize everything, their front end, back end, their processes of doing business. And even from the listeners today, think about how many businesses you've gone in and you go to sign in or do business with them and they're still using pen and paper. Doctors' offices still do this. Attorneys do this. A lot of people still use pen and paper. That business has to digitize first, meaning in a lot of times they have to go from on-premises to the cloud first before you can invoke AI. So AI is actually an accelerant to what's happening in the data center. And then the final one of the big four is the fintech, what's going on in the financial technology revolution. This is taking traditional financial transactions and putting technology around them and making them more efficient and cheaper and quicker. Some of this is tied to crypto, but not all of it. And so in the fintech world, I think that transition continues to happen, but definitely people still see that area as more fraught with risk. So it is a lot more volatility, and the fintech sector is definitely in the penalty box at this point as well.

Okay, so I want to dig a little bit deeper on a couple of these. So the first being AI. So you did mention, and just because you mentioned the term unbelievable acceleration, I want to talk a little bit there. We saw a deal this morning announced where NVIDIA took some, an investment in Marvell Technologies, and that's not the first time they've done something like that. NVIDIA just getting more and more entrenched in sort of the build-out of AI. Talk to me a little bit about, you know, AI. We know AI is out there. A lot of people are using the large language models and things along those lines, but talk about the investability of AI. And the infrastructure. We, we talk a lot about NVIDIA. That's the obvious winner, the chips. Tell us about how you view infrastructure and how that fits into kind of your investment case.

So this is a really big area to think about. So I think conceptually we need to think about these as being AI factories. And so when you do AI, you need a specialized place to do it. We call these AI factories. It's not just the NVIDIA chips. You need the whole ecosystem. You need routing, you need switching, you need cooling, you need power. And so these data centers come in. I mean, these are huge facilities, like millions of square feet, and they cost billions of dollars to, to run and operate and to power. And that is a really big deal because we need them in order to create the tokens and do the digital inferencing and just to actually have AI. And so that buildout is where we start. And there's a lot of companies that make money not only from the buildout but from after these data centers are operational. So let's talk about some of those. NVIDIA makes chips, AMD makes chips, Avago, who's Broadcom, they make custom chips. So if you're a really big firm like Google, instead of going NVIDIA and getting a generic chip, you go to Avago and you get a custom chip. So for you, it probably is going to take less power and it's going to work a lot better with a lot less latency. But you're also going to need— in an area that's interesting to me is you're also going to need a lot of memory and you need a lot of storage and you're going to need gear. And so an area that I think is really interesting is some of these last-generation tech stocks that were cyclical that are now AI beneficiaries. So the companies— think again, companies that make storage, companies that make memory. We kind of left them for dead because they were winners in the tech boom 1.0, but their market— end markets have been cyclical. So in up markets, they do well. In down markets, you have an inventory buildup and a correction. But now AI needs all of these tools. But these companies were built in a slow growth environment, and now we have a fast growth environment that's accelerating. So you have backlogs of demand and not enough supply to meet demand, and supply can't come online quickly. So you get a rise in prices. So revenues are up a lot. Earnings are up kind of a lot more. And that's what I mean by the kind of the AI ecosystem benefiting many, many companies. And so I think it's very interesting. I think it's very early, and I don't think investors appreciate how powerful these tailwinds are and how long they're likely to endure.

Okay. And then the other one I wanted to talk more about was cybersecurity. So, uh, we've had some investments in cybersecurity, which did really well over a number of years, but sort of in the last few months, or, um, I guess the last year or so, they've really, um, struggled to keep pace with some of the AI kind of hardware providers, which have done really well. So as you mentioned, AI is sort of contributing to a, a more dangerous threat landscape. Tell us what you think about cybersecurity as an investment and as just sort of an essential part of the whole ecosystem.

So it's necessary. It's essential. I think the demand will continue to grow. And I think as an industry, cyber will continue to grow. A couple issues I must point out. One is there's a lot of cybersecurity tools, and a lot of these are kind of like point tools. So if you look at like the Cybersecurity Index or pull up cybersecurity companies, there are going to be a lot of them. Some of them are hardware, some of them are software, some of them are on-prem, some of them are in the cloud, some of them at the front of the network. So there's sort of a, I don't want to say a saturation, but I think a lot of users would like a platform or consolidation. The other thing I think that we need to remember, it's one thing that these businesses make a lot of money, it's another thing what investors are willing to pay for these businesses. And so we have not seen a slowdown in revenue growth or earnings, What we have seen is more of a reluctance for people to pay a huge premium for these businesses. Now, that said, I love cyber. I think the big winners at this point, we like CrowdStrike. Palo Alto Networks is another name that, that we like and like a lot. And a new one that we're going to be adding when Brian does his April portfolio model creation is Cloudflare, which sits at the front of the network. Empowers a lot of websites and actually edge computing. But there's some other winners. There's some smaller names that I like in, in, in cyber as well. At least there's one that I really, really like. It's about a $5 billion market cap. It's a little small to add for clients' accounts that we're fiduciaries for. But I think there's a lot to like in cyber. It's been a little bit in the penalty box a little bit this year. Shares are down some, just like most of tech. But I think there are going to be some real winners in cyber. And again, from a demand landscape, there's a lot of demand to protect. I mean, you spend all this money in AI and your models and your data, and now you got huge threats to it. You're going to do all you can to lock the front, back door, and the side door, and cyber plays into that.

Okay, so thank you for going through those 4 themes. Definitely some opportunities developing, um, given the decrease in stock price kind of across all 4 verticals there, um, but with business continuing to get better. So when we see the divergence of business and stock price, that's definitely what we consider opportunity. Um, let's talk more about just navigating the landscape here. So kind of separating Headlines from reality. That's the hard bit of investing a lot of times is the emotional kind of difficulty or challenge that comes along when you see stock prices under pressure, portfolios under pressure, and you see a lot of red on the screen. So, Nolan, in a volatile market, often can be very difficult to separate what really matters from noise. We get a lot of noise through headlines. Some of it matters, some of it doesn't. But really, it's our job as investors and advisors to sort through that and find kind of the signal through all that noise. First question from my point of view, you've been around— I won't say how many years, but a number of years. As a market veteran, how do you manage this challenge both mentally and emotionally to make good decisions and come out the other end?

Yeah, managing the emotions and the stress of it all, that is a challenge. I think at least clients that are listening to this webinar, they have the option of turning off the TV and just not watching. We don't have that luxury. So I just try to continue to stay with my morning workout and get my endorphins going before I start the day. You're right. Some of these days when you're just seeing all red on the screen, it's, it's, it's quite incredible. So managing your emotions is how you do it. I think the other thing to remember is it won't always be this way. And we really have to think about not today because we're not spending the money today. We don't like to see it go down in the interim, but we're not spending it today. And so we have to think about, we have to think forward, you know, a year, 2 years. And so I think that's kind of what helps me. The other thing that helps me is just kind of thinking about we've had these opportunities in the past. I remember in 2022, I remember Meta was having another one of its episodes and the shares were down 65% in 2022. And you look forward 24 months and the stocks had more than doubled. I remember Nvidia, Brian, after you started at the firm, this 2019, Nvidia shares dropped 65%. And if you would have bought then, I think today you would have been up, I mean, 40 or 50 for 1 or something. So we just have to remember, if it's a, if it's a good business that is producing revenue and earnings, that is going to show up. I think the other thing that we all have to remember is when you own stock, we're going to talk about income securities and bonds in a second because I like talking a lot more about income. And I think it's interesting, income ideas, I think, are actually more powerful than stocks. But one of the things I want to remind people about stocks, the deck is loaded. Like, you are the house when you own stock because as a shareholder, the CEO, the management, and the board, they all work for you. And it's their job to get the stock price up. It's 100% their job to do it. And now in the US, the way our company is wired, the way our country is wired, it's the country's responsibility to get stock prices up. The White House pays attention to the stock market. The Federal Reserve Board pays attention to the stock market. And We're the best company— we're the best country on Earth for creating millionaires from the stock market. We have the deepest capital markets. We have the rule of law. We have capital formation. We have our own currency. We have all the innovation here. Anytime anybody wants to raise any big money, they come here. This is the place to be. We, we have the golden goose here, and we have 250 years of data to prove it. So you're already a winner and you have things on your side. Sometimes we just have to go through tough times and sometimes you just have to endure. But again, in these market environments, it's easier to spot winners today than when everything is going well. And when the sun starts shining again, that's when you'll see the results of what you did during these times.

I think it's a great, great and important point that you brought up, Nolan, about kind of everybody in business world and government world keeping an eye on the stock market. And in some ways, even when times may feel a little bit up in the air, that does keep the wheels on the wagon to some degree. So, that's positive. I want to talk, though, about risks. And the other side, the flip side of risk is opportunity. So, we'll talk about what the opportunities are coming out of these. But there are 3 major risks that we see right now. Which are interest rates, credit risk, especially through private credit, and geopolitical risks. So, I'd like to know your thoughts, kind of 1, 2, 3 there. And then what are some of the pitfalls that create potential difficulties for our clients' portfolios coming out of these 3 big risks that we're seeing here?

Yeah, and I think we should also throw in, these are the 3 knowns. And I guarantee you, usually it's some unknown that really whacks you upside the head. So, there's going to be some unknowns as well. Here are the known knowns. Interest rates, I mean, that is a really big deal. Interest rates control everything. When we had that bad market in 2022, it was the first time in many, many years where both stocks and bonds were down for the year. And this year so far, we kind of have, uh, uh, the same situation happening. Even in this past month, which was not good, March set records for bad things. Even bonds were down in March because interest rates went up. So the Fed has a really tough job on its hands. And my goodness, I mean, you're coming into an environment where the White House wants interest rates lower, but inflation is trending up and not down. And there's really not a lot of data you can pull to say rates should be lower. Should they be higher? Maybe not. I think one of the things for sure that would drive rates lower is a recession. That's one of the things we haven't talked about yet. Could this situation in Iran and otherwise drive us to recession? It could. It could. In the market before Iran, To me, I'd mentioned this, we've said this every week in our weekly DOR meeting. I've said this for weeks that the market environment was looking kind of queasy, and it's been that way really for weeks or months. And so, um, is the market telling us we're headed for a recession? It doesn't look like it. I think it's up in the air. It could, but it's not looking like it at this point. GDP preprint, the last one we got for GDP was +5%. Strengthening. So it doesn't look at this point like that's the case. We'll have to keep watching. But interest rates are a big deal. If anybody's paying attention to anything here, you should watch rates. Rates can't penalize us and stocks do well. So we're at about 4.35% on the 10-year Treasury. If the 10-year gets above 4.5%, watch out. That's not, that's not great. So interest rates are a worry. In credit, clearly from a risk standpoint, this is the big one. The great financial crisis in 2008, that's what's got us. It was a credit issue. And back then, it was tied to residential housing. So this one would not be as widespread. If there were some defaults in private credit where some software companies or some business development companies or some of these PE companies got into some, some issues where there was some default. I think that will be pretty well contained. I think it's about $1.5 trillion, I think, is what that market is. And if you take a look at defaults and then recoveries, maybe you're looking at $150, $200 billion in losses. I think the market can kind of deal with that. So that could be an issue, though, especially if it restricts credit otherwise. If there was some issue in private credit or another area of credit and then banks got more conservative and choked off lending, That is not good for the economy because that would slow us down. We're not there and we're not there yet. So we'll have to watch. The big one though is geopolitical events. I have been really impressed, actually, the last 15 months with how well the market has dealt with these geopolitical events. And I'm not making a political statement, but since Trump was inaugurated 15 months ago, I mean, we came in with Doge. We sent shots across the bow to our allies. I mean, we've shaken things up all over the place. We've poked China. We captured Maduro. We're doing a deal with Cuba now. I mean, these geopolitical events, they just keep coming. And the market keeps kind of chugging along. So this is a risk. The market has done a really good job with this risk. The flip side of this geopolitical one is it could, instead of being a headwind, it could become a tailwind. You know, if, if things turn around in the Mideast, if it leads to a safer Mideast, Middle East, then that actually could be positive for prices, could be positive for sentiment and multiples. So it could go the other way. But those are the three known risks and we certainly are going to have to pay attention to them.

Yeah, certainly a big hope on the Middle East, but no expectation there. And then on the flip side of that, Nolan, just opportunities before we jump into where the— where we're seeing things in terms of income.

Yeah. So we talked about AI infrastructure and compute a lot. I cannot overstress how much time we're spending here because there's a new group of winners that are going to emerge in the profit potential here is very attractive over a 1 to 5 year period. Generally, when you have a downturn or a new technical revolution, it's new winners. It's not the old winners. I think that's kind of the issue. We didn't talk about the Mag Seven, but I really want to because, um, they're really getting pounded, and they have been for, for months, really. And we say the Magnificent Seven, and we mean all these brand name household companies that you guys all know— Microsoft, Amazon, Meta, I can throw Netflix in there, you know, all of these big growth— Google is another big one. All these big trillion-dollar companies that have really led the market for many, many years have really been cast aside this year. And a lot of it has to do with the AI infrastructure and compute. You know, for some reason they're looked at as AI losers, and they should not be. I think part of the issue is spending. You know, if you look at the Magnificent Seven prior to the AI buildout, they were hundreds of billions of dollars in free cash flow per year. It's part of one of the reasons they did really well post-2022 is because people knew that they had strong balance sheets and good free cash flow. But now they're taking that free cash flow and they're securing AI infrastructure for the next road ahead as it relates to technology because they don't want to be left behind. But, you know, I'll be doggone, investors, you know, they want it both ways. I think if these companies weren't spending to secure their place in the AI future, I think the market would be penalizing them as AI losers. But they are spending to make sure that they keep up and they continue to win and stay at the forefront of what's happening and making money. And investors are getting sacrificed because they're spending the money. So I don't know how they want it both ways. What I would tell you is, generally speaking, there's 2 or 3 that we really, really like. But as a group, they're cheap. The S&P trades for about 19 to 20 times forward earnings. And that's just the broad-based S&P. Generally, the Mag 7 trades at a premium because they make more money and they have better cash flow. But right now, They're trading— some of them are trading cheaper than the S&P 500. Meta, as an example, trades at a discount to the S&P 500, but they're growing revenues at 25% a year and they're accelerating. Same thing with Nvidia. It's one of the Mag Seven that I mentioned, and shares are down this year. And it's unbelievable on a forward basis, you know, it trades cheaper than Walmart. And so I just, you know, I think there's going to be a lot of opportunities there. Energy and real assets, we do have some energy exposure, not a ton. At some point, this Strait of Hormuz thing is going to settle down. And I wonder about energy prices, energy stocks, and that whole energy ecosystem not holding up. If you go back 6 weeks, I think 6 weeks ago, I think the energy market was predicting oil prices being in the $50, $60 range a year or 2 forward. And even today, if you look at the forward energy curves, even with the $100 spike. You look at the forward curves and you go out a year, the energy market is still projected to be below $70 a barrel. So you need to be careful if you're piling into commodities and chemicals and all of that based off of what's happened the last month. Watch out. I think industrials— I think the industrial sector, again, we talked about fortifying our grid. We talked about power to the data centers. I think industrials will continue to be winners. And then finally, income. We love income. We're going to talk about income now. I think income's getting interesting.

I agree, Nolan. Let's, let's turn the page on stocks. Plenty of great opportunities here in stocks. But what we really like is the opportunity in income securities with over the last couple of years, you know, 2 years ago we were finding bond opportunities in the 7 to 9 range. Over the last, you know, 12 to 18 months, we've been back toward 5 to 7 and now we're creeping back up toward that 6 to 8 range. And that's a lot to do with interest rates just moving lower— I'm sorry, moving higher and bond prices moving lower. So, that's a more interesting and a more attractive income environment. I want to talk more about that. With that as kind of an environment that we're in, why do you see income mattering a little bit more in terms of how portfolios are put together?

So, I always say everybody likes income. I don't care who you are and what your last name is. Everybody likes income, whether you're spending it today or you're just letting it compound. It's an important part of a portfolio and returns. And a lot of our clients here are retired, so they need their portfolio to replace their paycheck. And so that's one of the things, but that's not it. You know, we've been following income and income securities, you know, since I got in the business, and that was the main impetus for us to start Jarvis. And so there's a lot more action in the income markets. You know, what's happening in the income market is directly related to interest rates. And believe it or not, stock prices are related to interest rates as well. So you're kind of on the front end of things when you're paying attention to income and income securities. And believe it or not, it sounds like a stodgy area of the market, but in the past, we've done very well with income securities. And so I think it'll continue to be a focus going forward. I know it's a growing need of people. And there are more income products or income investments that are out today.

Exactly. So, a little bit more crucial in terms of people kind of moving toward retirement, putting streams of income in place, taking advantage of, you know, higher rates, lower prices as an entry point to get into some of these investments. And that's why it really matters. Talk a little bit about How income brings buoyancy to a portfolio, Nolan, in times of trouble, stress, distress. How does it fit into a portfolio from that perspective?

So generally, if we're talking stocks and in this case, we can look at, you know, Nvidia, Nvidia or Walmart or any name. Generally, we're buying something today because we think it's going to be worth more in the future. But when we buy income securities, we don't have to worry about the future. The future is now because we're getting our returns today. You know, if we're waiting for some stock to compound at 10%, it may do that over time. But if we're getting some income securities that's paying us 10%, it's paying us today, and it's paying us either monthly or quarterly. And so you get lower volatility generally because you're getting paid today and you're not waiting. So it creates a different kind of return pattern in a portfolio. You tend to get a little bit more consistency in the portfolio. And that can help you do wonderful things. If you have a need monthly and you have income securities in a part of your portfolio fulfilling that need, then maybe you can be more aggressive on the other side of your portfolio because you don't need the money right away. Either way, I think it is a, it's a very interesting area. And I think with all the dislocation that we have now and the churn in the market and the volatility, it's actually, you know, there are few income opportunities that I think have equity-like return potential on top of the income.

So let's jump right in, talk about one of those. We've got a couple of investment opportunities we want to talk about, some of which are in client portfolios, some of which we're looking at. One is AMLP. We've been looking at this name for a while. It's the Alerian Master Limited Partnership ETF. It's a basket of limited partnership pipeline companies. Nolan, talk to us a little bit about what we see there. As you can see in the chart here, over the last 5 years, about a 21% annualized total return between, as you said, income and then also the capital appreciation. So kind of two ways to win in this one. What are you seeing in AMLP?

So I see a security that's recovering. Just so the viewers are aware, AMLP is a— it's an ETF or an exchange-traded fund, and it owns these oil and gas pipeline and gas distribution and everything in that ecosystem. Generally, that oil, when it's, it's pumped out in West Texas in the Permian, it has to get to Illinois or Florida or wherever it's going. It generally is going to travel there by pipeline. So we have millions of these crisscrossing the country. So these are infrastructure assets. Typically you could go and buy these things, but they kick off a K-1, and for taxes they don't really work, and you can't put them in an IRA. So in a basket here, you can get them. It pays a quarterly dividend, and it's taxed on a 1099, so it's easier to have. But this is an asset we like. You know, these businesses are infrastructure assets. They're typically not growth assets. And then the way the tax code works is 90% of the income they need to pay out to shareholders, the other 10% they can keep for themselves. So they don't generally have a lot of growth. They do have some growth projects they can do, but it's not like a tech stock. So they pay out a good chunk of their income. What that means is because they're not plowing a lot back into growth, all the growth that they get from their current assets, they're passing on to shareholders. So in the last several years, we've seen dividend increases of 3 to 4% on top of the return profile. And I think the assets themselves are cheap. We're showing a 5-year chart here, but if you go back and show a 10-year chart, they're still playing catch-up. I think there's a lot of upside to like here. These, um, master limited partnership operators, traditional oil, natural gas, liquefied natural gas, gas processing, I think there's a lot of upside here from capital appreciation, even from this point. The income's going up 3 to 5%, but I think stock prices can go up here as well. So this is one that I consider more of an everyman, and this one doesn't move really with this, um, with the price of oil. Think about it like a toll road. It's just barrels going through a pipeline. That's how they get paid. So it's volume, not price. So I think this works in any environment. It's not sexy, but it's definitely profitable.

Okay. Thanks for walking us through MLP, Nolan. And let's talk about one other, which is there's a couple of things converging on this next idea, which is, first of all, as we said, interest rates going up, that means the price of bonds, no matter what type of bonds, are going down. So that gives us a little bit more of an opportunity to purchase those at a lower price and in turn a higher rate that goes along with that. And then also all the spending going on in AI. So there's a lot more debt in these companies that are involved in the AI buildout. So let's talk about the bond opportunity that we have here today, which is the Oracle 2038 bonds, which pay 6.5% coupon. Tell us a little bit about, about what you see here and thoughts around this one.

So Oracle is one of these cloud hyperscalers. They're doing a lot of AI buildout for data centers for the Oracle Cloud. And to build these data centers, you're talking tens of billions of dollars. And Oracle has a lot of money. I think the market cap's $450 billion, but they don't have that much in just cash sitting around. So they have to go out and borrow it to build the data center, and the revenues will come later. So a lot of bond issuance there. Um, it's an investment-grade company, uh, Oracle is. So this is a bond they issued. It matures in about 12 years, 2038. Is when it matures. The coupon is 6.5%, so really nice coupon, and we can buy this below par. It's just below $10,000 a bond, so about 98 cents on the dollar we can buy this. And Brian did a really good job laying out the interest payments that you receive. So if we bought $10,000 worth of this bond, it cost us about $9,800 today. But here, when we get the 12 years of interest payments, and we calculate that. At the end, we get our $10,000 principal back. So in the end, on a $10,000 to $9,800 investment, we end up getting about $8,500 in interest payments. So about an 87% total return over 12 years, which we think is really attractive, especially for conservative investors considering just going to cash or putting their money under the mattress. I think this is a great, great way to help pay the bills in retirement and also to add some stability to a portfolio. So we like these. And like you mentioned, Brian, earlier, if you go back even 3 or 4 months, we're banging our head against the wall. How do we get 5% or 5.5% interest? Now that interest rates are up a little bit, we're starting to see bonds that we like creep into the interesting zone. This is one of them that's investment grade. But like you mentioned, on our bond run, we're seeing other ones that are in that 7% to 8% range. So the higher interest rates go, the more interesting bond opportunities become. And we're going to be more excited about locking in these income streams for longer periods of time.

Strong agree on that, Nolan. I know there, um, perpetually we have clients or there are other investors out there who follow along with us. Holding cash and looking for an opportunity, well, we think this might be the opportunity as interest rates have come up to a degree where you might have some really nice opportunities to lock in a nice stream of income for the next 12 years, for instance, in Oracle. So, we're going to bring it all to a close here, Nolan. When you step back and look at everything we've covered, what's driving markets, what actually matters versus the noise, and how the opportunity set has evolved. How do you think investors should be thinking about this environment today?

I think we should not necessarily be thinking about it today. We should look through today and think about how we want things to look in a year from now. You know, hey, what— the market went down, there were all these opportunities. What did you do when the opportunity showed up? Either you're going to get cheap prices or you're going to get good news. You can't have both. When I look at it, I'm, um, So who knows what's going to happen in the intermediate term? You know, we had a big rally today. Typically rallies do show up in bad markets. I mean, I think we'd been down the NASDAQ 10 of the last 11 days, which I think hit a record, and I think we had been down 5 straight weeks. So eventually we were going to get a bounce. Whether this bounce fades or not, who knows? But eventually this period will come to an end. There's a few things that I'm looking at that I think are attractive when volatility and the selling stops. Let's start with credit. We talked about the issues in private credit. We're tracking many holdings in private credit where yields are juicy, like above 10%, because people think they're going to be a lot of defaults. I'm doubtful that there's going to be as many defaults as what the market's predicting. So this is an area when we think the selling stops. We think we're going to be able to get really good return profile with income, with stock market upside. So it's an area I'm absolutely laser-focused on and watching very closely. The other side of it, like I mentioned, there's been a lot of stocks that have really been cast aside where you're— I mean, you just have to take a deep breath when you look at the stock charts. Interestingly though, when you go through the quarterly earnings call, A lot of these companies act like there's no problem at all. They just hit record earnings, record revenue, and they say the market's overreacting. Somebody's not telling the truth. And so will be interesting to watch the other side to see what that looks like. But there's a lot of opportunity, a lot of things to pay attention to, a lot of pitfalls we need to avoid. And so maybe it's early, but certainly there's some opportunity.

Thank you, Nolan. So, when you step back, markets are evolving, they're not breaking. Opportunities are still there, but you've got to be more selective. And that's definitely what we do here at Left Brain. Whether it's growth, income, or even capital sitting on the sidelines, there are more options today than there have been in quite some time. So, we certainly do think there are some opportunities for investors to take advantage of now. As Nolan said, you either get High prices are good news. I'm sorry, good news are low prices. And we're in that moment where it's low prices. So with that being said, Freddie, I'm going to turn it back to you, let you walk through what we've got coming up in Left Brain over the next few months, and then we'll open it up for questions.

Okay. Thanks, Brian. Thanks, Nolan. Just some great information. I see some questions coming in. So before we get to the questions again, just want to finish off earlier in the presentation. You saw the event for our upcoming estate estate planning seminar. Again, part of our role as your advisor is to make sure we're covering you holistically and discussing everything that's important. So we've scheduled an estate planning seminar lunch-in. Again, one of the questions came in and asked, how do I register for this? Emails and texts will be going out shortly, uh, with a link to register for the event to our existing clients only. What we're going to cover again is strategies to protect and transfer wealth efficiently. You know, you're aligning your estate plan with your broader financial goals, And like I said, we're going to have a panel of experts. So as soon as those texts and calls go out, uh, please make sure that you register for the event. And again, for their existing clients, you'll have a link that'll be sent to you. So that's one of our exciting events, but we have got an even bigger event to celebrate the market going up today. We've got a 10-year anniversary and it's going to be a big event. A lot of you have received the save the date, um, to our existing clients. Again, it is a black tie affair and we're going to come celebrate at the Morton Arboretum. Our 10 years ago, which was technically in 20— you know, we started in 2014, but we figured to wait when the weather got nicer, and we're doing it this summer, July 25th, at the Morton Arboretum. Again, a lot of you received the save the dates, but invitations will be going out for that as well. So we encourage you to RSVP for that one. All our clients are welcome. So again, we do not have a cap on that one. There's even information for those of you that are traveling out of town. There is the Hyatt Regency Hotel right by the Morton Arboretum that if you want to stay there, because we do have access to the Morton Arboretum for the entire day, and the event will run through the night ending at about 11 PM that night. So just a great event to show our appreciation for everything all you wonderful people have done for us. So we're really excited and hope as many of you can join us on July 25th, 2026 for that event at 5:30. So next, without further ado, I know a lot of you have sent in some questions, so you understand how to register for these events. But some of the questions that have come in, we'll start with the first one. And, you know, AI was discussed and it's talked a lot about the headlines, so there's obvious opportunities in AI. But the question was, but are there other less visible ways other than, you know, NVIDIA and chips to get into AI? And on the negative side, how does AI affect the markets? Worst case scenario, there are layoffs and unemployment rising. So is this scenario factored into the left-brain thinking?

So you're right. Let's talk about the worst case. Layoffs, unemployment rising. We've heard kind of a lot about that. There's actually, uh, was a couple of companies. I think it was Block when they renounced, uh, their— the old Square renamed Block a few weeks ago when they announced earnings, announced that they were going to lay off 40% of their workforce. Because of all of the efficiencies that they're getting with AI. And I think this is— this really sort of spooked the markets. Quite frankly, I think that's a one-off. I think we've heard just as much anecdotally that companies are going to be more efficient and they are going to be doing more with less. But because human workers and knowledge workers are going to be more efficient, they will become a lot more valuable because they will be able to do more. So it's undetermined at this point which way it'll go. The way these AI models work, and even when you have these AI agents, they don't run completely independent. They still need help. They still make mistakes. And so they still need people around. There is talk at the low level, maybe some dirty jobs that we don't want to do or we don't have enough people to do, that'd be a good place for AI to sort of come in and do these things like data entry and some of these other tedious tasks. So we don't really know. It's more of a macro issue. I will say on a company-specific level, if companies themselves are using more AI and less people, that do— that does mean that they become more profitable. And if you become more profitable, you become more valuable. So I think this is more of a political concern. I think you're going to see Congress get involved because if you see companies making more money, enriching their shareholders, I think when we talk about the haves and the have-nots, sometimes we talk about this K-shaped economy. That just means the top of the K is going to get richer. The bottom of the K is not going to do as well. That's a societal issue, and that'll be up to our politicians in Congress to cover. As far as the other obvious opportunities, and is there other ways to get in, I think eventually every company is going to have an AI strategy. Every company will have an AI strategy. And I think AI will boost the profitability of every company. So you don't have to directly make an AI investment. To get some benefits of AI. But I think if you're looking for like spectacular growth numbers, you know, some of these AI winners last year were up 3 or 4 times in a year. Now, that's not necessarily what we're looking for, but we've bought companies in the past like Avago when we first bought it a few years ago, went up 3 or 4 times over the course of 3 or 4 years. We didn't anticipate that. That. But it can be a huge wind in your sails if you're on one of these trends and you're on the right side of it. So yes, we will keep watching. I think there are other opportunities in AI outside of, uh, NVIDIA and the chips. I mentioned a couple of them. So I think, uh, in networking and switching, when you're in an AI data center, it's one thing to have these chips running, but then you have to get that information and data other places. One, you have to So there's the scale up and the scale out, and then there's the latency issue. And so now there's— we're using instead of copper, we're starting to use optical, we're starting to use lasers. You have the cooling of the equipment. And again, I think an area that's going to continue to do well, I think, is memory and storage. A lot of these memory and storage companies, it's funny, last generation we kind of left them for dead. Some of them had debt and we owned debt of these companies because we knew they were going to be survivors. But to see some of these companies that, you know, historically traded 10 or 15 times earnings with low growth potential accelerating earnings growth and revenues growth plus 30, and they still have this cheap multiple. So I think there's other ways to play it outside the chip. I think the AI ecosystem is definitely broadening and I think it is creating more winners.

Okay, next question. Um, quantum computing is touted as the next big tech breakthrough. Any exposure to that in your recommendations?

So, uh, one of the things about us when we're buying securities is we like profits. I mean, that was— that's one of the things that we definitely like to have, or at least a real clear— I mean, they have to be profitable on some level, even if they're not GAAP profitability and it's just non-GAAP cash. I mean, we need some level of profitability, not just some concept or an idea. And a lot of those concepts or ideas, they're flashy and they're exciting, but they can fall just as hard. And so Quantum, they're pre-revenue, let alone earning. So it's still early for us. I would say, though, if we were interested in Quantum, a name that we have had exposure to is IBM. I think I would play quantum through IBM first before I bought one of these other pure quantum companies that again are concept and pre-revenue. Okay.

And the next question again has to do with the Mag Seven, and I know we talked about it, but will you be moving away from the Mag Seven, specifically Meta and Google, to go into these new areas that you're speaking about?

No, no, no. I think, um, these are stocks that we would own and not trade. I think these guys are winners, absolutely winners. I think we haven't talked about catalysts. Remember, both of these businesses are basically make money from advertising. And so as we go throughout the course of the year, we have some catalysts. Remember, we have the midterm elections that are coming up, and I don't— doesn't matter really if the market if we get into a slower economic environment or a faster one. Companies need to sell their products and services, so every company needs to advertise. You can make an argument if we got into a weak economy, um, sales for companies are going to be tougher to come by. That means they should advertise more. And if we're in a good economy and you have more competitors you probably need to advertise more. And so remember advertising, we've been in a long trend of advertising going from analog to digital, meaning we're no longer turning on Channel 7 News at night and watching 7 commercials that are coming our way. It's usually some sort of digital, some digital advertising we're getting, and primarily it's through these mediums, either a Google medium or something involving Meta. So I think the long-term trends are still very much in place, and I'll go back to valuation. Metatrade's at a below S&P multiple. I think the forward number is like 18. Remember, they generate loads of free cash flow, high margins. Historically, they've been a good steward of capital. They buy back stock. And Google is the exact same way. Every time in the past we've sold Google, we regret it. And so not only the Waymo business that they have, I think if something like YouTube, if they separated YouTube and took YouTube out separately, that bill— that business may be a trillion. It's just— they just have fantastic businesses underneath the shelf, even outside of Google. What bothered us for a long time with Google is we were worried that they were going to be an AI LLM loser. And it turns out with their Gemini business, um, they have really turned that around, and it looks like they're going to be an AI winner. And so we're committed to both of these names. We think that they're both cheap. We think that if you look back 2 years from now, it's hard for us to believe those share prices won't be higher than they, than they are today. So those are 2 that we, that we really like, in addition to NVIDIA being in the Mag 7. Those are our 3 favorite.

Okay, so we'll finish up with just 2 more questions, be respectful of everyone's time. Um, I think we addressed Meta pretty well. Um, but the other one has to do with, again, volatile markets, but somebody possibly considering retirement. So if somebody was possibly considering retirement this year or next year, is there anything that they should be considering as far as the lasting effect of a down market currently?

So that one is tough, and obviously that's an individual thing. I'll give you some general ones, but, you know, I really suggest you reach out to one of us and let's sit down and talk about your individual specific situation. But I would say generally, if you, you know, if you're getting ready to retire You've got a financial model, and in every financial model there are downturn scenarios built into it. And we're a quarter in. I don't think I would let that blow up my whole retirement plan based off one bad quarter, because in retirement you can have many bad quarters. If it's a situation where you can flex your retirement, like you're retiring early, you're retiring because you want to, and you, you're on the fence, you have the option of working longer and you're thinking about, should I work longer or not? And you were thinking that way anyway, and you're trying to— maybe you're thinking about the downturn giving you a reason to stay longer. I mean, we should have that conversation. I'm a big proponent of if you're healthy and you don't hate your job, like your boss isn't a jerk, then I'm a big proponent of working longer than shorter. But again, that's a personal decision, and I'm sure one quarter of a downturn should not impact whether you can afford to retire or not. So let's pick this up in an individual meeting. Okay.

So we'll finish off with one last question. And we have gotten these from a lot of questions from, from, from our existing clients, these pesky MRDs that they're forced to take out. We have heard from a lot of people that don't want to take it, but you are required to. So are there any suggestions on what people should do with their MRDs this year?

So the required minimum distributions, you're right, we don't have a choice. Um, our government makes us take those or they penalize us heavily. Even if we don't need the money, they need the revenue, they need the tax money. That's why you have to take them. So after the money's out, the question is, what do you do with it? Well, if you do not need it for your living expenses and you have to take it out, then you probably want to reinvest. And you can do that and just move it from your left pocket to your right pocket, your left pocket being your IRA and your right pocket being your brokerage account. So you can just instruct us to move it to your brokerage account and then we can invest for you there accordingly. You don't have to buy stocks, you can, but you can buy bonds. We show this Oracle bond, income securities we can buy. But if you don't need the money, you should be, you should be investing. And if you're in a situation where you don't spend your RMDs, Basically, you're investing for your beneficiaries, whoever they are. So think about their age, their time horizon, their risk tolerance. And if they're young, then you should probably be buying stocks.

Well, thank you, Nolan. Thank you, Brian. Uh, I hope everyone enjoyed the information. We appreciate everyone attending. And again, if there are further questions, always feel free to reach out to us. Uh, for our existing client base, we look forward to seeing you at the events on April 18th. And of course the big celebration on July 25th. So again, stay invested, and we hope today was very helpful. Thank you to all of you for, for supporting us, and thank you for the information shared today, guys. Uh, great job, everyone.