Breaking Down Economic Indicators and Financial Strategies with Jeff Kickel and Ron Lang

In this episode of the Cents of Things podcast, hosts Jeff Kikel and Ron Lang delve into financial planning, the state of the stock market, and the current economic climate. They share insights on upcoming presidential debates and their potential impacts on the market, discuss peculiar historical facts like Burger King's 'Whopper Wine' and quirks from 'The Wizard of Oz' film. The duo also explores the highs and lows of investing in sectors like solar energy, the nuances of managing retirement funds, and the role of unusual economic indicators like the 'lipstick recession.' The episode balances informative content with engaging anecdotes and humor.

00:00 Introduction to Cents of Things Podcast

00:45 Political Season and Presidential Debates

02:21 Fun Facts and Trivia

05:30 Market Forecast and Economic Indicators

11:43 Investment Ideas and Solar Energy Discussion

15:42 Wind Energy and Final Thoughts

17:28 Conclusion and Farewell

Welcome to the Cents of things

podcast, where your money talks and

2

we listen, join host Jeff Kickel and

Ron Lang as they explore the economy,

3

financial planning, and the stock

market, adding a splash of fun to

4

make your financial journey engaging.

5

Each episode, they break down

complex topics to give you the clear

6

edge in your financial decisions.

7

Stay tuned and let's make

Cents of things together.

8

Jeff Kikel: Good morning,

Cents of things audience.

9

We're glad to have you guys here again.

10

Once again, we've got some

fun things to talk about.

11

We'll also Have some economic indicators

that ron's going to share with us and

12

a little bit about the markets ron.

13

How you doing, brother?

14

Good

15

Ron Lang: morning.

16

No, good morning doing you got

a political season's heating up.

17

So get your popcorn out or get

your vomit bucket out i'm not

18

sure which one vomit bucket

19

Jeff Kikel: or either that or your

no dos so much has been made of this

20

this upcoming presidential debate.

21

My my theory is it's going to be because

my theory is that once I, the president

22

is going to be not as exciting as he,

as everybody thinks he's going to be.

23

And I think.

24

The former president is going to be muted.

25

So I think it's going to be like

watching slugs call across the ground.

26

So

27

Ron Lang: my, my, my two

thoughts are number one, you're

28

not going to learn anything.

29

Nope.

30

Number, and number two, they're not

supposed to be exciting debates.

31

They're not supposed to be fireworks.

32

You're supposed to learn.

33

You're supposed to learn.

34

How would you handle this situation?

35

Yes.

36

What would your solution be?

37

I go back to boring.

38

Let's learn something not going to

39

Jeff Kikel: happen.

40

It's not going to happen.

41

And once again, CNN has made

such a big deal about this.

42

I've seen it.

43

Yeah.

44

Every countdown clocks and all the, Fox

is going to have a simulcast and all

45

this stuff and it's going to be boring.

46

So every year you're

going to learn nothing.

47

As Ron said, And it's just

not going to be exciting.

48

I've never watched a presidential

debate because they bore

49

the living tears out of me.

50

And nothing is ever, it's just a

bunch of gobbledygook in most cases.

51

Ron Lang: Gobbledygook's a good

52

Jeff Kikel: word,

53

Ron Lang: or

54

Jeff Kikel: maybe that's two words, I'm

55

Ron Lang: not sure.

56

Jeff Kikel: You've got some fun

stuff to talk about, I'm assuming.

57

I

58

Ron Lang: absolutely do.

59

All right, let's see.

60

Here we go.

61

All right.

62

You see my screen?

63

I do.

64

Wizard of Oz, 1939 movie.

65

The horse, the iconic horse of a

different color was used creating jello.

66

Jello.

67

I didn't even know.

68

I knew Jello has been around for a while.

69

I didn't know it was bad.

70

I didn't know it went all the

71

Jeff Kikel: way back to then.

72

Yeah, that's crazy.

73

Ron Lang: Yeah.

74

So it was they did they coated

the horse with Jello crystals.

75

But here's the funny thing.

76

Buddy Epson was the original Tin Man

and they used to spray literally silver

77

on him so that to a point where he

inhaled it into his lungs, got sick.

78

And he was taken off the, he

couldn't perform for the movie and

79

probably the last two last generation

doesn't remember that story.

80

But yeah.

81

So you want to talk about back,

82

for special effects and makeup.

83

Jeff Kikel: Yeah.

84

And didn't didn't the cowardly line, it

was like, it caused him all kinds of like.

85

the stuff that they put on him or the glue

that they put on him to get the stuff on.

86

I think he broke out from that too.

87

So these poor guys are like

just getting destroyed.

88

Ron Lang: And then of course,

Judy Garland, who the hell knows

89

how any of this affected her?

90

She she certainly went south

pretty quick within a few years.

91

Did not last too long.

92

All right, next one burger king

93

of this and then you read it, right?

94

It was called the so called Whopper wine

they were pairing wine with whoppers,

95

but it was only in spain that they

tried this out Because they did some

96

ridiculous marketing study that people

in spain loved wine with their meal

97

So in order to draw them into burke

Wow for dinner they wanted to Simple

98

and pair a wine with your whopper,

99

Jeff Kikel: it's what

goes well with a whopper.

100

What goes well with a, whatever

their version of a McFish is.

101

I don't know.

102

It's, this goes with a

good white Spanish wine.

103

This goes with a good, Tempranillo and.

104

Ron Lang: I'm thinking of a pinot a

pinot noir with my Oreo cookies tonight.

105

I'm not sure.

106

That's

107

Jeff Kikel: probably true.

108

It's maybe a cook for Dunking, but

as we talked about in the previous

109

podcast, the Oreos are smaller

now, so you gotta eat more of 'em.

110

Ron Lang: Yeah, you just gotta

put your fingers a little further

111

into the glass, that's all.

112

And he, this was interesting because

I was born about 18 years too late.

113

'cause all my favorite

music was from 65 to 71.

114

Me Too.

115

Led Zeppelin turned down

Woodstock to avoid being typecast.

116

Typecast is what?

117

And here's the crazy thing.

118

They were only, they'd

only just formed as a band.

119

I think the year before, because

remember they came out of the Yardbirds.

120

Jeff Kikel: Yeah.

121

Ron Lang: So they were only

out there for a year and they

122

were afraid of being typecast.

123

Jeff Kikel: Yeah.

124

I'm like yeah, this is the biggest stage

on the nobody knew it was going to be as

125

big as it was, it was some of the most, or

some of the biggest stars of their time,

126

Ron Lang: yeah, I thought it was fun

and interesting, but it's hilarious.

127

Anyway, I got to go back.

128

So our market has been at ridiculous

levels and you and I put together our

129

forecast in the beginning of the year,

they just might've been in December,

130

early January, and here we are.

131

We're already well past all of it.

132

Yeah, I still think we're gonna

133

It all depends on how deep of a pothole

we step in prior to the election.

134

I believe we're gonna be higher

after the election, but I just

135

cannot see unless there's a clear

winner going into the election.

136

I'm talking about five to

six or more points ahead.

137

I can't see how With a market

won't get thrown around and get

138

a pullback, which will be a great

time to get back in to buy the dip.

139

What are your thoughts?

140

Jeff Kikel: Oh, no, I agree.

141

And I could have never thought

that it's as high as it is today.

142

It's just been a ridiculous year and it's

one of those ones, as a, and I'm sure

143

you feel the same way as a money manager.

144

Okay.

145

I, I just am waiting for the shoe

to fall and, you have your hand

146

on the trigger finger or you have

your trigger finger on the trigger.

147

But I just, at this point, I'm

like, I can't not be involved in

148

this and be part of that ride.

149

But we're just going to have to

be fast about shifting gears.

150

If it decides to move the other way

pretty quick and I don't know what the

151

Ron Lang: trigger is.

152

Here's the conundrum.

153

I have people that are one to three

years away from retirement So as you

154

get closer to retirement you de risk,

but then they're saying i'm also missing

155

some of the upside here Yeah, and the

whole thing is like we don't know we're

156

gonna wake up tomorrow and another

october 7th will happen Yep, who knows?

157

Not wishing for any of that, but The

whole goal is to be a risk manager.

158

And the idea is, okay, you're missing

some of the upside, but we get a

159

five or 10 pull five or 10 percent

pullback in the next two months.

160

You're protected, right?

161

You're not, you're either you're

protected or you're not going

162

to see that much of a pullback.

163

It's definitely a conundrum and had some

tough conversations with clients, but

164

many of them are just scared crapless

about what's going on out there.

165

And they have been for 12 to 18 months.

166

Jeff Kikel: Yeah.

167

Yeah.

168

Once again, it's just, it's, I

just don't know what the answer is.

169

The answer for me is I watch

this like a hawk every day and

170

it just keeps rolling rolling.

171

We had that minor little

pullback throughout April.

172

And early may, pull back towards

the end of May, but, it's off

173

to the races again here in June.

174

And, we're going into the summer

months, which it's anybody's game.

175

Yeah, we, the volume goes

down, so the magnitude can be

176

up or down either direction.

177

And if.

178

If the volume's down, and all of

a sudden the sentiment slides to

179

we're concerned about the market.

180

It's anybody's game on what can

happen during that time period.

181

So just have to be prepared, and we're

getting pretty far away from the 50

182

day moving average at this point.

183

So I think there's that chance of

seeing things work their way downward

184

again, during the summer months.

185

Ron Lang: Absolutely.

186

Absolutely.

187

So I got two economic indicators.

188

One we covered in our last

podcast, which was the PCE.

189

And, this isn't just going

back five, 10 or 15 years.

190

We've been to the.

191

com.

192

This is going back 45, 46 years.

193

And we've never seen the depth of the

negativity with the 10 year yield.

194

And the three month, this is, a lot

of, look, I, we, we've talked about the

195

two and 10 the two year being higher

than the 10 year, the fed looks at

196

the three month over the 10 year and

197

everybody talks about the consumer

and the spending and everything

198

else, but realistically credit

conditions have tightened.

199

Yep.

200

So unless we get some type of a

flush out or a reset, so the fed

201

rate could come down 50 percent

in the next 18 to 24 months.

202

I don't see where the next bull

push in the economy is going

203

to be because What'd they say?

204

60, 70 percent of the profits

of the entire S& P 500 is

205

from five or six stocks.

206

Yeah.

207

So how are we going to get that next push

up if it's not going to be broad based?

208

And I think a lot of it has to do with the

interest rates and the credit tightening.

209

Jeff Kikel: It's just companies,

those few companies are, I

210

think largely because of AI.

211

They're major players in

the AI world right now.

212

So there, or they have some AI component

and that's what just keeps pushing them.

213

So people just put aside logic

and they just look at this is

214

the next push in the economy.

215

But yeah, it's not been broad based

and it really has not been broad based

216

for the last two or three years, and

there's one or two ways that can happen.

217

It could be that those,

now probably five stocks.

218

Pull back and they become less important

and that money scatters out a little bit

219

more to the broad base or they're the last

ones to fall and it pulls the market down

220

So I don't know what the answer to that

is You know, I think the most important

221

thing is keeping an eye on it and making

sure that you risk manage However, you

222

risk manage whether it's through asset

allocation whether it's through trading

223

whatever it is You want to be aware of

that and you want to be able to make

224

those adjustments when you need to.

225

Ron Lang: So now we got to follow

the most important indicator.

226

It's not the underwear indicator.

227

It's the lipstick recession indicator.

228

Oh, Jesus.

229

So this is monitoring

sentiment in lipstick sales.

230

Okay.

231

And right now it's almost like sentiment

from excellent, good, only fair to

232

poor and things are trending down.

233

Okay.

234

So lipstick sales are down.

235

I have no idea what this means or

why this means this, but I understand

236

the underwear sales, lipstick sales.

237

I'm not sure as far as an indicator.

238

Jeff Kikel: Yeah.

239

Guys don't replace underwear that often,

but women have to replace lipstick.

240

Hopefully they're

241

Ron Lang: washing it.

242

Jeff Kikel: Yeah.

243

That's true.

244

And hopefully if you're going

to donate it, you washed it

245

before you donated it, but.

246

Ron Lang: You throw those skivvies out.

247

That's what you do.

248

All right.

249

So then we have an investment idea.

250

I thought this was interesting.

251

And solar has been around forever.

252

Certainly in the last 15 to 20

years, it's it's certainly grown.

253

I know you were involved in a solar

industry of solar business for a while.

254

And I thought this was interesting

because in a correlation with AI and

255

data warehouse power, I think you're

going to see a lot more of these data

256

centers if they don't have them already

having a complete bank of solar panels

257

on their roofs and their property

to just help combat the skyrocketing

258

price of power and utilities.

259

And I will say this I'm

talking industry specific.

260

I could not tell you.

261

What a solar company

would be a winner here.

262

I have no idea.

263

Maybe you have a better idea.

264

No.

265

And yeah, the funny part is,

266

Jeff Kikel: and I was actually just going

through this as an investment theme, did

267

some research and I'm like, they all suck.

268

I can't find a 1 that makes

me excited at this point.

269

They've all been on this

kind of gradual downtrend.

270

And I've not seen anything, the problem

with solar companies is they rely so

271

much on subsidies and, subs subsidies

are that you just don't have any control

272

of it in the in the solar business.

273

Yeah, you get subsidies in the

form of a tax credit for an

274

individual and for businesses.

275

But that only lives for one year,

and you're going and going and

276

they can change the subsidies.

277

Those can go down over time.

278

There's just an immense

amount of changes that happen.

279

And that's really the only reason

solar gets sold in a lot of cases.

280

Now, I will tell you, I,

I added solar to my home.

281

The good part is, we're going into the

hot months of the year and I know exactly

282

what my bill is going to be every month.

283

I, it, my, it will go up

slightly because we just can't

284

produce enough power on my roof.

285

I could add double the solar panels.

286

And, in peak times of usage, we

just can't keep up and it drains

287

the battery down and, it's pulling

from the grid at that point.

288

But.

289

My bill will not be over

150 bucks during the summer.

290

Wow.

291

I'm surprised it was even that

I have my solar bill, which is

292

consistent every single month.

293

So when everybody's talked about this

increase, in, in electric costs and

294

all that, electric costs over the

last three years are up 25 percent and

295

they're getting higher this summer, I

know pretty much, I'm going to be in a

296

pretty tight range when it comes to that.

297

So that's.

298

That was the reason I did it.

299

I didn't do it as a mathematical

calculation of when it would get paid back

300

and all that I did it as you know what

I want to be able to know that I'm going

301

to be consistent from that perspective.

302

Ron Lang: And the problem is the cost of

making solar panels, the materials are

303

still so expensive, and I was going to

bring up subsidies if you didn't bring

304

it up, because without those subsidies

it's a lot tougher to justify the cost.

305

Jeff Kikel: Yeah, it was funny because

my dad was involved in the solar industry

306

in the seventies and that's what killed

the solar industry in the seventies,

307

they were massively subsidizing all this

and then all of a sudden they shut that

308

down and boom, the solar industry went

away and it really didn't come back again

309

for another 30 to 40 about 30 years.

310

And even

311

Ron Lang: today, I could have said

it 20 years ago, the price has got to

312

get cut half, when we live in two, we

live in two states where the sun is

313

out most of the year and it's pretty

hot, but if they could cut it in half

314

without subsidies I think you could see.

315

I don't know what percentage of houses

have it or apartment complexes, whatever,

316

but it should be appreciated approach 50%.

317

If it makes it worthwhile.

318

I don't know what that does for margins

and if you can attract the right talent,

319

but at some point we'll get there right.

320

At some point we'll get there, but

I just thought that was interesting.

321

I

322

Jeff Kikel: think it's a power solution,

but it's not, the, the people that are all

323

about the, the planet and everything else.

324

The only solution is solar and wind.

325

And I drove through West Texas, God,

awful, ugly country to begin with.

326

And it's now even uglier with,

all these windmills out there.

327

And the funny thing is, we're

going through there and it's

328

20, 25 mile per hour winds.

329

It was somewhat windy day and

half of them are shut down because

330

they can't run them, when you get

upwards of 30 mile per hour wind.

331

So it's what's the point?

332

Ron Lang: I don't understand that.

333

Cause I actually sat on a plane with

a guy that was very big in the wind

334

turbine industry, and he said, in

order to make a windmill worthwhile,

335

you There has to be at least an eight

or a nine mile an hour per wind.

336

You figure 30, you'd have, you'd have

plenty of energy being generated there.

337

Yeah.

338

Jeff Kikel: But they, there's a limit

to how fast they can turn at that point.

339

And so then it puts a

lot of stress on 'em.

340

So they only turn it at.

341

A certain amount of revolutions

per minute and just jamming

342

more wind in there doesn't help.

343

So then they end up shutting

down and, it's okay, all right.

344

So you've put multi billions

of dollars into these things.

345

And just because it's windy, it's

the West Texas plains, it's flat

346

as a frigging pancake and there's

always wind out there, and okay.

347

How often are these things shut down?

348

What's the deal with it?

349

It's insane.

350

And God forbid, they are just the

most ugly things I've ever seen.

351

So I just can't even imagine it.

352

And especially the ones offshore, you're

sitting there at the beach watching these

353

stupid things twisting off the beach.

354

And still they're only producing about

15 percent of our power in Texas and

355

there are tons of the damn things.

356

I got you.

357

So until next time.

358

Thanks folks.

359

We're appreciate you guys coming on.

360

Hopefully this was something

you learned and we'll continue

361

to do stuff like this for you.

362

We will see you back

here the very next time.