Market Caution & Contrarian Plays | Crossmark Global's Victoria Fernandez Returns to Buy Hold Sell

[00:00:03] While most of Wall Street traders are left scratching their heads following Federal Reserve Chairman Jerome Powell's interview on 60 Minutes' Past Weekend, some professionals are actually out there saying, well, there might be even more to the story. With us today we have Victoria Fernandez.

[00:00:20] She is the Chief Market Strategist at Crossmark Global Investments in Houston, Texas and along with me is Tobin Smith out in Scottsdale, Arizona. Victoria, welcome back to Buy Hold Sell. Victoria, I've been demoted. I used to be the co-host. Now I'm just Tobin Smith.

[00:00:36] Now you're just a guest. You know you're the co-host and you're the gold standard of Buy Hold Sell, Tobie. Too late, Todd. I'm trying to think of something different than talking about the weather. So listen, Victoria. Hey, Victoria.

[00:00:50] Let me ask Victoria, what is Starboard Victoria on this one, Tobie? Because I saw you were making the rounds last week with the big meeting. With the big meeting channels in New York. And I can't help but notice that your narrative is completely different than what we're hearing

[00:01:10] from everyone else because right now it looks like there are somewhere, I hate to use the word cross again, but there are cross wins that we used to have to start worrying about and some challenges for the rest of the year.

[00:01:22] Tell us though because I gotta say you're actually on the side of not being extra, extra bullish right now. Yeah, I'm really not. I mean, we look at what's out there and look, you know, I'm kind of old school when it comes

[00:01:35] to the idea of looking at leading economic indicators, trying to find the red flags that are out there for the economy. Things that historically have told us we should be going into a recession. And there have been a mountain of those.

[00:01:49] I mean, if nothing else, leading economic indicators down what? 21, 22 months in a row. You've got this inverted yield curve three months to 10 year where it's been inverted about 460 days at this point.

[00:02:04] I did see where the analysts put out saying the average of going into a recession is around 580 days. So 120 more days, four more months possibly we might see a larger pullback or a recession, but I just think there's too much optimism out in the marketplace.

[00:02:24] Much of it based on momentum because we've had a consumer that has been supported by stimulus and by increasing wages and the ability to change jobs so easily being supported by that soft landing narrative and the belief that the Fed is going to cut

[00:02:41] rates sooner rather than later, at least up until last week. And that there's going to be six cuts this year. Well, at the same time, people anticipating that we're going to have a super strong economy with above trend growth and 11 to 12% earnings growth.

[00:02:57] So to me, it's like you have pieces of a puzzle that don't fit together. You can't tell me we're going to have above trend growth, 12% earnings growth. And at the same time, the Fed is going to have a need to cut five or six times for the economy.

[00:03:13] They just don't fit together. So we're not saying we're extremely bearish, but we're very cautious right now. So we don't buy into the extreme bullish nature that you're hearing a lot right now. Well, Victoria, I mean, first of all, any of the idiots that are saying that we're

[00:03:30] going to have a six rate fight are, I don't know what they're on. I'd like to know what they're drinking because I need some of that stuff. The second one is I am in the camp.

[00:03:41] I mean, I've been bullish on economy since a long time, but I'm in a camp and I've been in the camp. So that historical stuff means jack shit after you went through a pandemic for two years and then went through, you know, two evasions and now, you know,

[00:03:59] strides in the Middle East. Behembers change when you get those types of macro global events. A, B, the Federal Reserve has been wrong about their rate cut numbers or at least the Fed fund futures has been wrong for 28 years in a row. They've never gotten it right ever.

[00:04:17] Even in 2007, Stevie Wonder could have figured out we were going to go through seven and they didn't get it right. So I'm looking at a different course, but I'm looking at our portfolio right now. And again, we're heavily in AI.

[00:04:30] Our portfolio is up 41% in the last five weeks. Now, you know, obviously NVIDIA, obviously SMCI, but other guys down down the pecking order and I'm more much more about the macro. So you know, you can't have a recession.

[00:04:46] I'm sorry. You cannot have a recession when you have 78 million people on pensions, when you have 40% of homes owned for cash, when you have rising wages, et cetera, et cetera. 32,000 layoffs in the tech industry doesn't mean squat. There's a million and a half jobs out there, right?

[00:05:02] So, so I, you know, I'm, but I am saying certainly we took profits today on NVIDIA and SMCI and, you know, because they were just insane. I mean, you know, those aren't professional investors. Those are momentum investors. Those are Agile investors totally get it.

[00:05:18] But man, there's still, you know, we see a lot of sectors that were staying in making money in and Todd, I even re-bought our LPG shippers today because they finally bought them down. Well, transports are actually doing pretty well on a relative basis.

[00:05:34] So it makes sense to do that. And let me say we under no circumstances are we saying that people should not be in the market. We don't want people in cash. You want to be invested in the market.

[00:05:44] What we want to make sure people do is exactly what you just said. When you have these green days, when you have these updates, go in there and trim some of those names. Bob Dahl, our CIO always likes to say, don't be so greedy, right?

[00:05:58] Get in there, take some off the table. You don't have to come out of a name, but trim those positions and get ready to put them somewhere else. You look at sectors like healthcare on a relative basis. It is doing phenomenally against the rest of the SMP.

[00:06:12] Financials have taken a little bit of a turn on a relative basis as well and are doing pretty good. Obviously take out what we've seen with the New York Community Bank, take that aside, but some of these other, some of the bigger banks with those strong balance sheets.

[00:06:27] So healthcare, financials have been doing good. Industrial's have been doing well. Look at Caterpillar. And typically that is a sign of a booming economy when industrial's do better. So I don't want to take that away. Right? I'm not saying the economy is going to tank.

[00:06:42] I just think there's, maybe we've gotten a little bit over our skis and some of these when you see how those magnificent seven are now they're taking it down to magnificent six or five versus the other 496 names in the SMP. There's quite a divergence in that performance.

[00:06:59] So you have to be selective, but I think now's a great time to step into some of those sectors and pick up some names that maybe have not been doing as well. You'll have more upside on some of those.

[00:07:11] So let me talk a little inside baseball here, Todd, because people at home have to understand that, you know, the average stock market return for the last 40 years has basically been nine to 10% including re-investing dividends. Right? Solid. If you have a portfolio like ours up 45%,

[00:07:28] now I'm looking at the number in a month. Yeah. And then there's a lot of people that are going to be spending a lot of money on stocks. And I think that's the point because we're in the very right

[00:07:40] spaces and what that means is a whole bunch of momentum people that they don't buy stocks. They just buy tickers that are going up are pouring in and they will pour in until somebody f's up, you know,

[00:07:51] if a video misses by a penny, if SMCI misses by a penny, then they're down 25%. And all you have to do is look at, you know, SMCI for missing by nothing. Look at Intel, for instance. So there's like three different markets is what I'm trying to say.

[00:08:05] There are institutional investors like our dearly beloved Veronica Victoria and sorry, and they never buy everything on day one. You build positions. And the way you know you're investing is when you get excited when something comes back in value because you're not looking at the next day.

[00:08:23] But if you're checking your portfolio, which is really just your trading account every five minutes and you're seeing, you know, SMCI go at $76 yesterday. Nobody knew what SMCI was until we put it out in May of last year. Thank you very much.

[00:08:39] Then you're trading and don't confuse the trading with the investing. And if you're better beyond your game. Okay. Let's pivot just slightly on this because I want to go back to the idea of a slowdown in the economy. Very slight recession call whatever you want.

[00:08:57] Come up with any adjective that you like, but it does make sense because if the Fed does start cutting rates, they need to have a really good reason to start cutting rates and a slowdown would make sense.

[00:09:09] However, on Friday, the jobs number comes out and it is a blockbuster number. So does that change the outlook for what cross mark is thinking? Because right now, I mean, even if you cut those numbers in half, it's still a robust labor market.

[00:09:28] Yeah. It doesn't change our longer term outlook because when you look at that number, we also have to kind of dive under the hood a little bit more on this. We know there's seasonality factors that account for some of that game, not all of it.

[00:09:42] It was a great number. We have to acknowledge that one of the things that we're looking at in that report is the productivity, the hours worked and the wages. So we had hours worked come down. We had wages move higher, which means productivity is moving higher.

[00:10:01] And this is where we try to connect the dots for our clients. If productivity is moving higher and growth continues to do well, you look at Atlanta GDP now it's what 4.2%. I think it's not it. They continue to move it higher.

[00:10:16] That means the neutral rate for the Fed funds is actually higher than what it is now. If the neutral rate is higher. Explain the neutral rate, Bronica. So it's basically it's going to be that level where you're neither helping nor hurting the economy.

[00:10:33] It's that rate where everyone just continues to chug along and things do well. If that is higher, that means the Federal Reserve is not as restrictive as we think they are. So I think we have to think down the path a little bit.

[00:10:47] Don't just do a knee jerk reaction because we had a great jobs number. What does that truly mean for the economy and for the Fed? Does it mean that real rates are higher than what we thought? Does it mean the Fed is not as restrictive?

[00:11:02] Does it mean the Fed's going to stay higher for longer and that's the mistake, right? Everyone says the Fed will wait until they make a mistake is the mistake going to be they hold too long. And then you do really start to hurt the labor market.

[00:11:15] It's these scenarios that we have to think about. We don't think the economy is going to tank or fall through the floor, but we do think there's going to be some some volatility and we think on those pullbacks. As Kevin was mentioned earlier, that's where the

[00:11:31] traders step in and really take advantage, make some tactical moves. If you're a longer term investor, you can do the smaller trades. You can trim. You can buy. You can position yourself in companies that will hold their price and hold their value during volatility.

[00:11:47] But I think we have to really be careful here and not just take every good number that comes through as saying, oh, the economy is great. Let's think about what that means for some of the decision makers in regards to rates.

[00:12:00] Well, let's not also forget that part-time jobs were about 40% of the new ads. Very important that we saw part-time jobs go higher. And as you know, that is a signal. I actually was looking at a graph of part-time versus full-time workers.

[00:12:14] Full-time workers were actually on the decline and part-time workers on the way up along with temporary jobs showing some signals of stress. So those are concerning for the markets as well. But look guys, it's an election year. Tell me one administration when they're up for

[00:12:33] reelection that isn't going to try to spruce up the economy, that we're not going to get more stimulus coming in. This is what I think can make our outlook incorrect. I think having more stimulus come in to support the consumer could make it to where you don't

[00:12:49] see a pullback because you've got all this artificial stimulation going on. Then that just pushes it down the road further and you're looking at next year probably before you see a lot of these elements where you have to pay the piper on what we've done over

[00:13:04] the last couple of years. That probably comes to roost next year. Hold on. I'm going to take the bait on this one. Let's talk about this stimulus, potential stimulus. Can you tell the audience what that may look like? Well, we're looking this week actually at some

[00:13:22] of the new tax laws that are coming out. Child tax credits increasing. That's a positive for the consumer. We're looking at the future of the economy. We're looking at the potential stimulus. That's a positive for the consumer. We're looking at research and development components

[00:13:40] for corporations that would help them in regards to some of the deductions that they're taking so there are certain elements coming out helping both businesses and individuals exactly what the current administration wants to see as they come near an election, look, there is a chart that shows there

[00:13:59] country that has one reelection if there is a recession within 24 months of an election, never are they reelected. If there's not a recession, they are always 100% reelected. So they're going to do everything in their power in order to help juice this economy.

[00:14:20] What we're going to have to be careful of all of these stimulus components that we're seeing, what does that mean in regards to treasury issuance? Does that push yields higher? And does that cause the stock market some grief going forward?

[00:14:34] Well let's not forget that you know there's this world out there Victoria and Germany is basically in recession. The UK is in recession. France, Spain, you know, the Italians are never in recession because they're just hammered all the time. They're just happy. They don't care.

[00:14:54] The global, I mean remember money is fungible right? It goes to where it's best to treat it. Right now it's getting best treated the United States. The one that really got me was in China

[00:15:03] that stock markets only had been bad for three and a half four years. They created these ETFs that own like Japanese stocks which is doing well and own American stocks but the ETFs are

[00:15:14] selling at a 30% premium to the actual stocks that they own. Now that's cray cray. That is, you know, that's out there but this is the first time I can remember in a long time

[00:15:26] that there's money coming into the US equity markets. It's coming in a big way from China. It's coming in for a big way. I'm working on the deal right now with G42. G42 is the AI

[00:15:40] investment group for the UAE Emirates and they're going to write us a check for $220 million and they just say where do I send it? There's more money going into, just not just United States but I'm trying to say. We have a huge amount of money going into,

[00:15:58] you know, what we used to call ESG now I just call it sustainability. We have a huge amount of going into AI that requires a huge amount of data center

[00:16:08] and chips to sell so far. It's on a positive feedback loop victory in my opinion I can show you the math that more power begets more power begets more CPUs begets more use and right now we're in that

[00:16:24] uplift and oh by the way, you know, in video if you take the forward earnings that we're using our target is $700. I saw Goldman came out a couple days ago $700. SMCI we have about $900. Why?

[00:16:36] Because on a forward basis they're going to grow their earnings 125% this fiscal year and then 140% next year so that makes their PE about an 18. So there's a reason why these, you know, the

[00:16:52] bricks and mortar or you want to call the bricks and shovels in the AI space that have high margins that have a sustainable have orders that are booked out for the next 18 months.

[00:17:01] Right. If I'm a portfolio manager, I cannot be not in those stocks and also they're the safety trade at the same time. I can't tell you very often that I've ever remembered in 40 years of doing this

[00:17:14] that technology was not only the growth trade but it was also the safety trade. Yeah because of all the cash they have. And I completely agree you have to have exposure to these names. You cannot eliminate them from your portfolio whatsoever. Now I will say in our

[00:17:31] large cap strategies Microsoft is the one that we're most overweight versus our benchmark. We have exposure to all of the names some of them like Apple were a little bit underweight versus benchmark

[00:17:44] but you do have to have exposure. I think it's also important though in this type of environment where in our opinion there's still some uncertainties outside of that group that you're talking about. You have to have that diversification not just within your equity

[00:17:59] portfolio per se but look you need to have fixed income allocation. If I can get you a 5% yield on an 18 month or two year treasury add a little bit of that into your portfolio to have some steady

[00:18:12] cash coming in to your portfolio. If you can use covered calls like we do for so many of our clients. Write short covered calls and in this volatility you can continue to move those and

[00:18:24] generate income off those premiums. Do that to give yourself a little bit of downside protection. I know you give up some of the upside on those but it gives you some diversification. An equity market neutral strategy right an absolute return strategy. Some global exposure selectively.

[00:18:44] These are the things I think you need to be doing in your portfolio right now and not just be all in those big mega cap names although you said the letters AI right. It seems

[00:18:56] like that's all someone needs to say on their earnings call for the stock to do well. We saw with Qualcomm Qualcomm how they're going to be using AI. It's a name that we actually

[00:19:06] like outside of that. Those mega seven names. We like that. But we also heard I said Caterpillar reported earlier talking about industrials they mentioned how because of all of the AI that's going on it requires a lot of infrastructure. Absolutely companies to build out new buildings

[00:19:27] to handle a lot of this and they're benefiting from that. So the AI component really as you were mentioning is widespread and flows through. This is why I'm saying be selective find some of

[00:19:39] the trends that are doing well that have some longevity to them. These are the names you want to invest in as long as they have good cash flows. I don't want to take that away from

[00:19:49] everyone. You got to watch those balance sheets. Free cash flow has been one of the most positive factors leading to outperformance and those names we've been talking about are perfect

[00:19:58] examples of that. Let's not forget Todd I know you got to go to the break. Let's not forget about farmers. I have some dear friends up in Iowa. You know a small farm for them is like 4,000 acres.

[00:20:13] He was just telling me this last weekend 100% of his farming in yield is done automatically. No drivers. No we got run into tractor all the harvesting the picking the sorting etc. And he says he saves about a million and a half dollars every quarter because he doesn't have 25

[00:20:30] people out picking. Doesn't have the fertilizer guy out there. He doesn't have the other type thing there. This is where that productivity comes into play that we're talking about that 2.7 percent productivity growth in the fourth quarter. That's where this is coming in.

[00:20:43] All right let's leave it there guys on that because just wonderful stuff. And since Victoria did talk about tech I'm gonna have to ask her what other sectors she's taken a look at.

[00:20:53] Maybe some individual stocks as well. But we're going to talk all about that in the next break next block. So with us today Victoria Fernandez she is the chief market strategist at Crossmark Global Investments down in Houston. You can go to crossmarkglobal.com for more

[00:21:08] information. And her name is not Veronica I want to say that right now. I was going to change it today. Absolutely. We'll be right back after the break. By Hold Cell brought to you by Crosscheck Management. Ready to up your game and learn

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[00:22:34] By Hold Cell with Toman and Todd. Welcome back to By Hold Cell. Well with us today we have Victoria Fernandez. She is the chief market strategist over at Crossmark Global Investments

[00:23:06] and also with me is my co-host, Toman Smith who also is the host, the only host for the new money mavericks show that is about to debut in a couple of weeks where you can watch it on

[00:23:19] Tubi, Pluto, any other streaming service that you want. It's going to be a wonderful show. I know it's going to be everybody's on the edge of their seats, Tobi. I know. I know but you know the first guest I want is Victoria Fernandez.

[00:23:39] It'll be a short show if we do that. Well, Victoria is a superstar and we already know that and that we were just talking about technology. I mean everybody talks about the tech sector and why not? I mean it's a winner

[00:23:57] and we know that but Victoria, I have to ask name some non-tech sectors that you like. Yeah so there's a few out there and we've talked about already here this afternoon kind of

[00:24:08] some of the sectors that have had pullbacks earlier this year and we like to go in and find names there. So financials is one of the areas that we like. We know the balance sheets are

[00:24:19] strong for the big banks and what a lot of people probably don't realize is up until last week with the New York Community Bank prior to that 100% of the constituents in the financial sector were in an uptrend and so there's some momentum going in that financial sector.

[00:24:37] Right? We like some of the bigger names. We like Citi, everyone likes J.P. Morgan so we like J.P. Morgan as well. They're just kind of the creme de la creme of the sector

[00:24:47] but Citi had good earnings. They're expecting loan growth like 3 to 4% over the next couple of years. You're getting a 4% dividend with the name and it's trading 13 to 14 times so look at some of the

[00:25:00] names in the financials and see there. So we like financials. We also like healthcare. I know there's been some concern about healthcare. We talked about how on a relative basis they're performing really well versus the S&P. Cigna is probably one of our favorite names in the healthcare

[00:25:18] space. There was talk of acquisitions and mergers going on a little bit with Cigna. That's now behind them. The stock has done better since then. It took a little bit of a hit on that announcement.

[00:25:30] It's back to doing better but again if you're looking longer term investments in your portfolios where you can generate a dividend and you have that quality earnings growth, we like Cigna.

[00:25:41] And then the final sector that I would put out there and look, you are talking to a Texas girl born and raised in Houston. I bet you can guess it's probably going to be the energy sector.

[00:25:56] We know the troubles that we have seen from the energy side and there was always this big debate over the last couple of years. Is it the supply or the demand that's going to drive

[00:26:06] these names? Obviously we're having issues in the Middle East but you look at production here in the U.S. We continue to see production move higher. These companies have so much cash on their balance

[00:26:19] sheets. They can do the capex that they need to do. We know some of them hold back a little bit. Conoco Phillips is a name that we like in that area. So there are places besides tech

[00:26:32] that you can go and not just these sectors. There are specific names in other areas that we like as well. So you just have to be choosing and dig in and find the ones with those strong business models,

[00:26:45] strong balance sheets, good cash flows. I would throw Petrobras in there as well. Petrobras has stupid cash flow. The dividend we estimate this year is going to be something like 26-27% because they have a format of how they have to pay the dividends out because the Brazilian

[00:27:04] government owns 38%, 39% of the company. Yeah, if you can have some global exposure, that makes perfect sense to put into a portfolio. Yeah, that's what ECOs don't want. Go ahead, Todd. Let's talk about the energy sector for a second because a lot of the guests that come on

[00:27:22] actually Gina Martin Adams from Bloomberg was on last week. She mentioned the financial sector and that was the first I had heard that. Now obviously you validate it also for our audience, but energy right now. Let's break that down a little bit. Are you speaking of,

[00:27:39] you mentioned Conoco. So it sounds like the big oil companies ExxonMobil, Chevron, those are winners that you're looking at. But anything else, maybe Valero for the refineries. I mean, is it the entire sector or just pieces of it? No, I don't think you, there's no sector that

[00:27:56] I'm going to say the entire constituents of that sector are good to go. So Valero, we have exposure to Valero on our fixed income side. We own some Valero bonds there. We obviously have exposure to Chevron and to Exxon. I mentioned Conoco Phillips. Some of the smaller players,

[00:28:13] and when you look at some of the names like a Cheneer, well then you're going into lower credit quality in some of these names. And I think you have to be a little bit concerned there.

[00:28:23] So this is a sector where you really need to do your homework. You need to check and see what are their debt levels? What do those ratios look like? Yes, they have solid cash positions on

[00:28:36] their balance sheets, but you need to look and see the debt loads. That's something key for these names. Obviously there's a ton of regulation going on in this sector too. So

[00:28:46] you want to be mindful of that. But it's the big players that I think we would focus on right now. Once we get past some of the issues that we are seeing currently, the Middle East being one of

[00:28:58] them, a new administration or the current administration come November and what policy looks like then. Maybe you can start going into a little bit more widespread within the sector, but we would stick with the big names for now. I would also throw in the...

[00:29:13] Liquify natural gas. Are we going to hear it? I'm just saying, brother. Not liquefied natural gas, you bonehead. Propane, LPG. Who cares? Yeah, well here's the deal. If you're in India, I'm just going to be my Ross Perot for you, Victor. India is the largest importer of liquefied

[00:29:35] petroleum gas, LPG in the world. 70% of the LPG comes from her backyard and it is put on a liquefied petroleum gas at BLCCF large tanker, which we own BWLLF. We own AVACF. Those are the ticker

[00:29:51] symbols because if I tell you the names, it's too confusing. And their rates are up about 75% year over year, which means they are gushing cash flow. Today, the dividend on BWLLF, let's call it a Bay Wolf, is about 28% because they pay out 85% of their positive cash flow

[00:30:12] because they paid off their boats. But then we have this Panama Canal thing that I think people are sort of forgetting about, that February 12th, only 25 boats a day usually have 62. So because of that, they're going the long way around South America to get to India or they're

[00:30:33] going the long way around the good hope in South Africa to get to the Suez Canal. Oh, wait a mean, they can't go there either. So all those extra days means that the inventory of ships

[00:30:44] available to ship LPG are much less. Therefore, if there's more demand than supply, Todd, even you would understand the economics of that, right? Absolutely. And look, what that means, going back to what we were talking about in the previous segment, that stickier inflation

[00:31:02] that I think the Fed is watching very closely, you know, I just don't think we're going to have a consistently downward trending inflation number. I think there's going to be some bumps in this road,

[00:31:12] which is going to cause the Fed to take a little bit of a pause. And this is a perfect example of the type of thing that could feed through to that shipping costs are up 300% over last month.

[00:31:23] Yeah, container shipping costs, you know, particularly Chinese New Year coming right, so they were trying to get everything out there. Those those products, you know, they're going to be more expensive. Everybody can't, you know, shop on Tywin or Sheehan or one of those other things

[00:31:41] are. I will say this though, I also for my dog next door, I went on Sheehan. I love that. Yeah. And he loves it too. Is that the money Mavericks mascot? I'm just curious. That could be. Listen, buy. That's fine.

[00:32:02] Very good. Victoria, I want to ask you because you touched on the tensions in the Middle East. Now, flashback here, Toby and I did a show a long time ago on Fox News, Neil Cavuto hosted it

[00:32:17] where they talked about when there are tensions in the Middle East, it is an enviable business model because when they're acting up, oil prices go higher because there's always the fear that a

[00:32:28] scud missile is going to rocket or you know, go into an oil oil field. It's called the risk premium, Todd. Risk premium. That's where I'm going with this because is there a risk premium? Because

[00:32:40] I see that stocks like Exxon, Conoco that you mentioned are rising right now. I can't help but think, I mean, I know we're bumping up to their earnings reports next week, but do you think that maybe because of the tensions in the Middle East,

[00:32:54] that is the reason why we're seeing a little bit of appreciation with the big oil companies? Look, it's definitely a factor, right, Todd. I mean when you have things going on and disruptions

[00:33:04] to the supply chain, I mean, we had the biggest disruption to the supply chain in the history of forever with COVID and we saw what happened there. So any kind of disruption to that

[00:33:15] is going to cause an increase in there. But I think add to that the fact that you have OPEC Plus saying, we're not going to increase what we're producing. Sorry, it's staying the way it is.

[00:33:27] That adds fuel to that fire. Now there is a little bit of, you know, buffer to that with the fact that the US is producing more. We're hitting some all-time high levels, but at the same time, there's a lot of concern going on. So yes,

[00:33:42] the Middle East conflicts and the potential for them to go even further. Obviously, we've seen the US and the UK launch some attacks over the last few days. That's going to add to what we're seeing in

[00:33:55] the price appreciation there, the risk premium as well. Yeah, let's not forget that Saudi Arabia needs $87 a barrel to break even on their spending. I'm going to be over the Emirates here

[00:34:06] in a month or so. And to rent, to get a hotel room in Abu Dhabi, try about 800 bucks a night. Well, I've never been, but I'm going to wait for prices to go down before I go then.

[00:34:20] Well, you probably have a risk of being kidnapped over there, but that's a whole other thing. Yeah, the whole construct for Saudi Arabia is they put $28 billion into an AI fund.

[00:34:35] It's called G42. And that's why I'm going over they and the United Emirates for some of the projects that I'm funding. Dude, they can't get the money out fast enough. They see AI for what it is.

[00:34:46] They have the money to put after it. It's coming out of the sheep's pocket. So it's not exactly, he's not begging for money. So I would just add that in there that it's G42 go to G42.ai.

[00:35:01] Yeah, it's $24 billion of money that the Emirates have put in. They want to own the smart city. They want to own a lot of the healthcare driven in AI. And I'm bringing them a company that uses

[00:35:18] machine learning but also molecular modeling with 16 different drugs in phase one or phase two. They're going to put $250 million in it like nobody's business. And then I will just I'll be selling this house and the other house and then sort of combining together

[00:35:34] having a minaret little, you know, okay. I love those guys. I love their money. I love their money. There you go. That's right. We all do. Okay. All right. Well, Victoria, I got to ask you

[00:35:48] one final thought here real quick. I saw you were on Charles Payne show where big fans of Charles, he's a great friend and being over at Fox business. You mentioned Home Depot.

[00:36:00] What are your thoughts on real estate because Home Depot, I mean it's a proxy into that sector. It is and we've seen a lot of controversy around housing. Obviously when rates went higher,

[00:36:11] we saw housing pullback as kind of that two steps forward one step back for that sector over the last year and a half or so with rates coming down with a 30 year mortgage coming

[00:36:22] back down with a six handle where it had been a seven handle for so long. That's been beneficial for housing, but one of the reasons we like Home Depot because they cater to two different groups,

[00:36:33] both the professional group and the do it yourself first. I am neither don't ask me to fix a pipe don't ask me to do anything. I can't do it. But for those that can Home Depot is really good

[00:36:45] for that and coming up on the spring selling season for homes when we know inventory has been low. This is when people either fix their homes up to sell them or they just bought a home and

[00:36:55] they're fixing them up afterwards. Combine that with and I know a lot of people laugh at this, but look back and you will see the spring time season people spruce up their yards.

[00:37:06] It's been a winter. They get outside in the warmer weather. Home Depot typically gets a pretty good boost from their gardening segment as well. So combine all that together. It's a good

[00:37:17] time to probably get into Home Depot, hold it in your portfolio for a while. And then like we said in the very beginning when it goes up, you can trim some of it and book those profits. Yeah,

[00:37:28] I'm the total Home Depot guy for the garden set for the flowers, man. I get a text from the gal who runs it. I said, Tobia, we're going to mark down, you know, geraniums 50% because

[00:37:39] they've been around for too long. I go get them. I plant them. I actually feed them for crying out loud. And I just need like a cactus or something that won't die because I am not talented

[00:37:51] with that at all. Sorry. Farmer Tobi, I love it. Well, that's great. Well, I gotta say, Victoria, you always bring it. You are, I mean, first class, I mean, the audience loves you and you really

[00:38:03] delivered today and we can't thank you enough. Final, final question though. I know you're in CJ Stroud country down there in Houston. Any picks for the Super Bowl? Oh, come on. I'm going

[00:38:13] 49ers all the way on this. I am. I have great confidence in that offensive line and Trent Williams to protect Perti's blind side. And I think they're gonna do it. We'll see. But I'm pulling for the

[00:38:28] 49ers. You never be a California guy. Tobi, what do you think? But you never bet against my homes and Kelsey, now that they have a defense that is better than the freaking offense at least the last

[00:38:41] two weeks ago it was so. That's true. It's gonna be a good game. It's gonna be a really good game, I think. It's gonna be a great game. And I gotta say, since my Ravens aren't in it, I mean,

[00:38:51] I can I hope for a tie? I mean, I don't know. I guess I'm just going for that. So, but we'll see. But listen, we want to thank you, Victoria, for joining us today on Buy Hold So. Like I

[00:39:03] said, you were fabulous. We definitely will love to have you back again. Absolutely. Thanks guys. I guess flattery will get you everywhere, Todd. Is that really your whole aspect of life? There you go. That's right. So, on behalf of Victoria Fernandez and Tobin Smith, host of the

[00:39:19] New Money Maverick Show, I am Todd Schoenberger and we'd like to thank you once again for joining us on Buy Hold So. Coming up later in the week, we have Reese Williams who has some

[00:39:29] breaking news for the audience. It's definitely a show you will have one. I thought you said Reese Witherspoon. Come on. Maybe next week. We'll catch you next time. Take care. Buy Hold So brought to you by Crosscheck Management.

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