The Weekly Trend
The Weekly Trend
Episode 208: The Years are Short
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In this week’s episode, David and Kevin discuss Nvidia earnings and stock split announcement, other recent stock splits, Dow Theory and divergences, semiconductor seasonality, recent market performance, and the holiday weekend.
Welcome back to the weekly trend podcast. Today is Friday, May 24th, 2024. I'm David Zierling. Ian McMillan is on a well deserved vacation. I'm here with the ever professional Kevin Ferrari. How are you, Kevin?
kevin-firari_1_05-24-2024_083856I don't think I've ever been necessarily that professional in my life, other than when I had to be for the interview and then I pretty much threw that out the window.
david_5_05-24-2024_083855Oh, you've been great, man. It's always good to have you on.
kevin-firari_1_05-24-2024_083856Other than that, just a little sunburnt, that's about it.
david_5_05-24-2024_083855A little
kevin-firari_1_05-24-2024_083856I was 99 percent sure that's what you're going to use, but then, I was waiting for it.
david_5_05-24-2024_083855Yeah, I could, I could have gone various ways, gingers are sensitive to the topic,
kevin-firari_1_05-24-2024_083856That is true. It's a very touchy subject.
david_5_05-24-2024_083855touchy subject. So didn't know if I could go there, but it's a sign of seasonality in Wisconsin. I would think that if we're talking about sunburns,
kevin-firari_1_05-24-2024_083856It's that time of year.
david_5_05-24-2024_083855and you're outside.
kevin-firari_1_05-24-2024_083856Yeah, for sure.
david_5_05-24-2024_083855That's good. You putting salve on that thing or what you got rocking? I
kevin-firari_1_05-24-2024_083856I guess I'm going to,
david_5_05-24-2024_083855on it. got some
kevin-firari_1_05-24-2024_083856I
david_5_05-24-2024_083855I don't know about that one. I felt like that was. didn't know what to say when I heard that one.
kevin-firari_1_05-24-2024_083856think it was a little late in the sunburn cycle to try that one from what it sounds like where it's most effective, but
david_5_05-24-2024_083855okay.
kevin-firari_1_05-24-2024_083856I'm curious enough if I remember it. next time. So maybe try it. But yeah, I've never had it this bad and there's a lot of chemicals and ointments and things that have been going on it. So
david_5_05-24-2024_083855When I, and I love and respect Dominique I just had never heard it before. And I'm a ginge
kevin-firari_1_05-24-2024_083856I don't know.
david_5_05-24-2024_083855We tried everything
kevin-firari_1_05-24-2024_083856You're learned after a while. I would think right as a, I don't know what a group of people, if you will, that,
david_5_05-24-2024_083855people.
kevin-firari_1_05-24-2024_083856it's just not worth the effort anymore. It just can't, you're not going to fix it.
david_5_05-24-2024_083855Yeah. I'm one of the, yeah, I'm one of the fortunate ones where I can actually tan over time. I can't jump into it. Like I can't just show up at the beach and let it fly for two hours, but. I can tan, but
kevin-firari_1_05-24-2024_083856You can get there,
david_5_05-24-2024_083855time, yeah, I can get there. It's just a longer trip,
kevin-firari_1_05-24-2024_083856baby steps, right?
david_5_05-24-2024_083855baby steps. Can't, you can't get it all at once. Can't boil the ocean. It's great to have you on, plenty to cover. We had Nvidia earnings yesterday.
kevin-firari_1_05-24-2024_083856Really? I didn't hear about that.
david_5_05-24-2024_083855I know now the interesting and what's interesting, what I would say is interesting about that is. You talk to an industry related individual they absolutely heard about NVIDIA earnings, maybe about 30 percent of retail. For example, my wife is not asking me about NVIDIA yet. And when I asked her the other day Hey, you ever heard of NVIDIA? And she's only because you told me. My mom hasn't texted me about NVIDIA yet.
kevin-firari_1_05-24-2024_083856They don't really have people at the gas pump next to you on the morning and be like, Hey, did you hear about that Martins? No,
david_5_05-24-2024_083855it's this interesting, potentially early phase. We have no idea, but it's, I would say it's not a household name. Like we don't talk about NVIDIA the same way we talk about Amazon or Apple, right? If you asked your parents or grandparents about Apple or Amazon, they absolutely know what those things are. I don't know that we've reached that category for the average retail investor the United States.
kevin-firari_1_05-24-2024_083856no. So I don't think they really have the product that's in your face necessarily. If you're, I don't know, people that are probably more so into like gaming and things like that, where like the graphics cards are more of a big deal where you get into like the Chevy versus Ford thing. But on that side of the industry, it, Amazon showing up to your house, or at least my house for crying out loud, it seems every day. We don't get to go there, but yeah, I just think they fly under the radar a little bit.
david_5_05-24-2024_083855And there was a period and I don't even know if I'd like bringing up this circumstance because I'm not trying to make the comparison timeframe wise, like Cisco was a network gang name so they didn't provide a good, they didn't provide some type of commodity, like a phone. They didn't provide a good or goods like Amazon. This was a networking company. Back in 95 to 2000, that did get to grandma's level of attention where I remember much older generation at that time saying, Hey, can you buy me some more of my Cisco? Giving a possessiveness to the discussion that this is my Cisco. And so it's an interesting dynamic. Cause I don't think we've reached that level yet, Like most people listening to this are gonna be like, yeah, I know what the video is come on, why are you guys spending so much time on this? I just think it's important to point out that while yes, industry specific wise, people are aware, but it hasn't reached this, it, the video has not come up as a topic in client meetings. It is not, Hey, do you guys want a video or what's your, Whereas, yeah, I own Apple. I have Amazon and like people talk about those things. So it'll be interesting what this Thanksgiving or Christmas brings if Nvidia continues to move higher, which it did get a positive earnings response. that's one of our things that we're looking at is not the earnings themselves. I actually don't know what their earnings were. I don't know what they did. I don't know. All I know is that the price reaction, the opinion of the market, which is, which we view as being the smartest all market participants, that the weighing machine, the average creating machine is smarter than any one individual had a positive response. So price responded positively, I believe up 10%. After earnings now, whether that sticks or not is to be determined. It's always that step one. And then the following days, like it One day. It's gotta be ongoing.
kevin-firari_1_05-24-2024_083856Yeah. Yeah, especially with these gaps, right? We see those come through after earnings fill, though, sometimes, or test the half gap, and then off she goes. Yeah.
david_5_05-24-2024_083855We had a gap in the video. Around the what we'll call it the 955 level up into 1020 that there's a price gap in it And it's it's one of those things where you want to continue to see follow through on that we don't know if we get it, but it is the largest component of semiconductors And maybe I can use that as a segue into another type of analysis when we've talked about semiconductors here in the past, if, if we're talking 100, 200 years ago, we're talking about a agrarian society, right? Very, farm based. And then you go into the industrial revolution, if we are now in the tech age, semiconductors would be a significant thing to study. if your largest component in semiconductors The video it's worth paying attention to the video, but there it's not like agrarian has gone away. We still eat food. Like we still need farmers. Farmers are amazing. They put food on the table. They keep getting better and better at yield and what they're harvesting and able to produce. And same with industrial production, too.
kevin-firari_1_05-24-2024_083856And really the technology advancements, really, have just fueled, both of those areas, right? They're getting better because technology is getting so much better, right? You're getting data from things now to where, you know, they're doing like these variable applications of like fertilizers, variable seeding, like all kinds of crazy things. Like it was just up Turkey Island, in the central part of the state. I don't know, was that like two weeks ago or something like that? Like they're like watering applicators and things are like all on satellite feeds so they can move themselves to different parts of the field. So just the way things work now are just crazy.
david_5_05-24-2024_083855Yeah, isn't that wild? Could you imagine, being transported from a hundred years ago to, to today and what farmers are able to do?
kevin-firari_1_05-24-2024_083856Witchcraft.
david_5_05-24-2024_083855Yeah, like it would be straight up. They know the moisture content. They know I think you brought up the middle part of the state. That's, I think that's a sensitive area where they have to bring in irrigation and they're watering
kevin-firari_1_05-24-2024_083856That's a lot of sand.
david_5_05-24-2024_083855Yeah. A lot of sand, The fact that they know where they have the ability to look or that you can send a drone over a field and understand or what, I don't want to sit here and pretend. I know. I think farmers are some of the most intelligent people on the planet, the things they have to deal with. So I don't want to pretend I know what they do. You're right. That technology is just fuel on that fire to, to do things better. And at the same time, we, it's not like industrial production has gone away. We still have raw Are produced. Yeah. There are still metals that go in your phone. Yes, your phone is a tech device, but now it's a commodity apps that are happening inside there. But semiconductors are indicative of that, like tracking what semiconductors are doing. And that's where, that's a long winded way for me to bring us to this concept of Dow theory. And maybe if I can set the table here, Dow, way back in the day, he's actually like late 1800s, early 1900s.
kevin-firari_1_05-24-2024_083856Yeah. This was pretty YouTube.
david_5_05-24-2024_083855Yeah. This is pre YouTube.
kevin-firari_1_05-24-2024_083856Yeah. Like way back, even before the internet.
david_5_05-24-2024_083855yeah, it might even been pre tube.
kevin-firari_1_05-24-2024_083856Mm-Hmm.
david_5_05-24-2024_083855He developed the industrial average and the transportation average. So the Dow Jones. The same Dow Jones that we're talking about when we, whether it's on TV or wherever you collect it is actually named after someone that's named after Charles Dow. We call him lovingly Chuck Dow. His main premise is I'm going to take the 30 highest priced industrial stocks. So this is not cap weighted. It's a price weighted in an index. I'm just going to tally up the price of the top 30. And then I'm going to compare that ongoing to the same concept using transportation stocks. And his theory was basically, I should be able to see industrial production. And compare it to the transportation of goods, right? I'm And then I'm transporting it.
kevin-firari_1_05-24-2024_083856right?
david_5_05-24-2024_083855some type of divergence there, that would be some type of warning sign to the market So The table there what are we seeing? that type of analysis between industrials and transportation,
kevin-firari_1_05-24-2024_083856Essentially the, industrial average broke out and moved into eyes, basically December of last year. Whereas. The transportation average really just continued moving sideways and just consolidated. They really didn't confirm each other.
david_5_05-24-2024_083855A non confirmation,
kevin-firari_1_05-24-2024_083856Okay.
david_5_05-24-2024_083855when these divergences happen. Is it fair to say that let me step back, you're saying industrials have moved higher, transportations have not
kevin-firari_1_05-24-2024_083856No.
david_5_05-24-2024_083855in its most simplest form, and that's been going on for you can call it 6 months.
kevin-firari_1_05-24-2024_083856Yeah, I would say that's it.
david_5_05-24-2024_083855Yeah, and these divergences like this have been a predecessor to market corrections When confirmed. The hard part in the analysis is divergences can go on sometimes for much more than six months.
kevin-firari_1_05-24-2024_083856Yeah. And really that's true for a lot of different divergences too, right? Like even RSI divergences too can have that nature where they can be pretty extended. You really don't know how long they're going to take to play out if they do at all.
david_5_05-24-2024_083855It's one of those things, a simple way to put it is we would be looking for confirmation from the transportation average. Which has been a hot mess since May of 2021, but if the transportation average can get above the 17, 000 level, that would then confirm the move out of the Dow Jones Industrial Average Index, which that horizontal level. in December of 23. And we touched 40, 000, a nice round number. And we've since reversed a little bit, namely yesterday. But so we have a Dow theory divergence at the same time. If we were to modernize that analysis and say, if we are a more tech based economy currently, that's, this can always change. And again, this isn't to say we're not an industrial economy, it's just that tech has become the largest weighting in S& P 500 we look at tech and compare it to the S& P compare it to like semiconductors. Semiconductors being, I love that they call them semiconductors because it's like a digital train, like transportation. Semiconductors are transporting. Digital goods and tech is that digital good that it might make sense to compare semiconductors to technology. What are we seeing in that environment? If we're just looking at, and this is a little bit harder analysis because a lot of the averages or ETFs that you look like have semiconductors lumped in them.
kevin-firari_1_05-24-2024_083856Yeah, pretty commingled for the most part.
david_5_05-24-2024_083855So it's hard to get that differentiation. And I know before we hopped on here, we just talked about maybe just comparing software versus semiconductors. Interesting to notice that.
kevin-firari_1_05-24-2024_083856Yeah, you got like the same look, really.
david_5_05-24-2024_083855It's just inverse where the product, the technological good is the one that's diverging from the part that's transporting it. So you have a divergence there. Does that come to fruition? We have no idea. If you look at something like IGV, you'd want to see that clear 90. confirm the move outta semiconductors, which have been alive and well and have been a leader since the market bottom in late 2022. And really the poster children for this move off the bottom in late 22 and even more so since it started accelerating in October of 23 as Eli Lilly and Nvidia. Are really two of the main. Leaders out of that regime and they continue to confirm new highs. And so we continue to see health, like things being healthy in this market environment, unless you have pushback on that.
kevin-firari_1_05-24-2024_083856No, I don't think so.
david_5_05-24-2024_083855And in an interesting development, not only to the earnings was Nvidia announcing a stock split, right? So for every they're doing a 10, 10 for one. So for every share that you own, get nine additional shares. But at the same time, the price is divided by 10. So it's not like you gain some type of statistical advantage. You just get more shares at a lesser price to equal what you have. So if you've Dollars in one chair, you're still gonna have a thousand dollars, but in 10 shares,
kevin-firari_1_05-24-2024_083856Yeah.
david_5_05-24-2024_083855up in June, what, when we look at stock splits. Are these a good thing? Are they a bad thing? You have any thoughts on stock splits kevin?
kevin-firari_1_05-24-2024_083856What do you, actually I was just thinking about this, randomly this morning. Not necessarily that, but what do you think the company's thoughts are necessarily on doing these splits? Like why they think it's a good thing. What do you think the, I don't know.
david_5_05-24-2024_083855guess is they're getting some type of advice on right because running a company cash is still king, right? You still want to have liquidity and if you feel like You can develop a situation of accessing cash, right? Because if you have cash you can grow your business, right? You can Higher talent, you can get better technology. You can have better resources to carry out your service to your customer. And there's a couple of ways you go and do that. You take your existing revenue, but then can you. Multiply your existing profits. How do you go do that? Maybe you go to the credit market and you issue bonds. The reason why stock markets even exist is it was another way to raise cash to carry out and execute the mission of the business is you went to the stock market. You raised capital, the capital markets. So I'm sure there was analysis done on if we do this stock split, would it actually increase participation in the stock? Therefore providing more capital to the company. That's A theory, Right? Because a retail investor being able to buy one share at a hundred is easier than one share at a thousand. Now I don't, what I think
kevin-firari_1_05-24-2024_083856I'm saying.
david_5_05-24-2024_083855popped in my head that I think where you're maybe you're, I don't
kevin-firari_1_05-24-2024_083856Oh yeah. I was gonna say, you're walking right in the doorway, man. Keep going. Taking us back to where I thought we were going.
david_5_05-24-2024_083855fractional
kevin-firari_1_05-24-2024_083856Fractional shares. Yeah, exactly. Depending on where you got your money now. Is this even really a thing that matters anymore? Does it mean, what,
david_5_05-24-2024_083855Yeah, I love
kevin-firari_1_05-24-2024_083856Fidelity you can get fractional shares? What if they're, it's like the S& P 500 and it might even be, Something else, I don't know, but like Interactive Brokers, you can get fractional shares. What, Robinhood, I think, does fractional shares. Does this really even matter anymore?
david_5_05-24-2024_083855Yeah, no, I think that's a valid, I would say we are definitely in the sunset phase of needing to be concerned with whole shares because lots of firms are providing fractional shares. Now, will admit that I don't know if the fractional share is happening at the ground floor. Like I'm not sitting here saying that fractional share is being recorded at the DTC per individual, Is the firm where the security is being held creating a synthetic fractional share, right? Like they hold one
kevin-firari_1_05-24-2024_083856They don't?
david_5_05-24-2024_083855quarter to each individual Just recorded. It's a bookkeeping entry. And so do fractional shares actually exist at the ground level? Maybe that's, maybe that, we could sit around a And figure this out
kevin-firari_1_05-24-2024_083856because then you think, just as your participation rate in fractional shares grows, you just think then that institution also has to participate at the same level for the actual shares, right? Probably. I don't know.
david_5_05-24-2024_083855right? Point is exactly valid. If the boardroom was saying, hey, this will get more involvement in the stock, that argument continues to dwindle based on the fractional share availability.
kevin-firari_1_05-24-2024_083856Right.
david_5_05-24-2024_083855Now, I don't know what other considerations there could be. I'm there's always the, you don't know what you don't know. Be, I have no other, no idea a stock split helps with any of their other debt obligations or any of their other, I don't pretend to know those things, but I do know. That to your point, it's likely that they start to go away because of the fractional share availability. And
kevin-firari_1_05-24-2024_083856you
david_5_05-24-2024_083855not, Oh, go ahead.
kevin-firari_1_05-24-2024_083856look as to your point, right? You're like, is this a good thing? You think 10, 15 years ago before this was even a consideration, right? I guess the general thought would be lower price, more retail investors can participate. You should see, like volume increase in the stack and you would assume appreciation. That would be the general, thought behind it.
david_5_05-24-2024_083855Let's say you own one share. It allows yourself to divest without selling the whole thing. Now, when we study historical stock splits, while they might be great for for access, I would say the four returns are mixed when we, when they, when companies start doing this, Google and Amazon Shopify did this in 2022, the Google was February of 22. Amazon was June of 22. Shopify was June of 22 and it's a mixed bag. Like Google stock decreased in value after that Amazon stock decreased in value Shopify that happened to happen during a bottom Apple did it in August of 2020. And it really has, it, it's not like Apple has gone gangbusters since August of 2020. And so most investors, you should get a, if the motivation is to get more retail involved, isn't that just handing off the bag? And I think that's where people might need to get a little skeptical. About this is that if they're truly doing this to allow more access to retail, isn't it for institutions to hand off to retail? So it's another thought processes. It doesn't necessarily mean clear skies and I'm impressed with how quickly the stock split is happening. I believe it's happening in June of
kevin-firari_1_05-24-2024_083856Yeah, it seems like a quick turnaround, and I haven't really paid that much attention to the others, to see when they're first actually announced.
david_5_05-24-2024_083855when they're announced and when they're
kevin-firari_1_05-24-2024_083856It just seems quick, but maybe not. You never know
david_5_05-24-2024_083855you step back and look at the big picture Environment that Nvidia has been a leader since the low since the bottom in late 22 since the acceleration in late 23 That they're now announcing a split and the splits have a mixed result when they're implemented as far as what I mean by that mixed result is not about the company. It's about the stock performance. It's not always like good, great and fine. In fact, we tend to see six months returns that do not match S and P 500 if that market leader is going away. So we want to pay attention to that and I'll give kudos to the video for reading that semiconductor for May, June and July is really strong. You look back five years, 10 years, 1520. It's only got stronger the closer you go in time, but semiconductor seasonality is really strong over the summer. they would issue that they would do that not issue more shares, but split into that seasonality Pretty good advice from a company perspective. So I did I had I did not anticipate that we were gonna run the bases All the way around on NVIDIA 20 minutes. But it, we it was important to tie in Dow Theory, that comparison of industrials versus transports. In the modern era if Chuck Dow were alive, he'd probably. Point to, hey, we have, we produce technological things and a lot of it is software and that's transported over semiconductors. So compare the two, we have a divergence there. And so while we have a bull market on our hands, it, we're not sitting here saying it's risk off, but there are divergences underneath the surface worth paying attention to.
kevin-firari_1_05-24-2024_083856Mhm.
david_5_05-24-2024_083855Last week when Ian and I chatted, we had a hundred percent of sectors above a 50 day. We had 100 percent of sectors above a 200 day moving average. We had 100 percent of sectors with a 50 day above a 200. last two things I mentioned are still applicable, but there's a fair amount of sectors this week that pulled back into their 50 day moving average or even below. Thursday was an interesting day because that was the video earnings day market gapped up, but then sold off the entire day And created a bearish engulfing candle yesterday.
kevin-firari_1_05-24-2024_083856Mhm.
david_5_05-24-2024_083855Do you feel comfortable describing what that is to our listeners?
kevin-firari_1_05-24-2024_083856Yeah, so I suppose the easiest way to picture it you have one, especially this week We have multiple basically the whole beginning of the week was essentially sideways, right? So you have multiple kind of sideways candles and then one You know full candle with a wider range that fully Eclipses those other ones but bearish engulfing right to the downside Obviously red candle fully eclipses, either the previous day or in this case, essentially the whole previous week's worth of daily candles which you know can possibly signal You know, it's a reversal candle right or at least potentially I guess we'll see I mean he still needed something right confirmation of that To the downside, which at least so far, I'm not sure what I checked again this morning, we haven't really gotten, but
david_5_05-24-2024_083855right And so what kevin is describing is if you want to think of if I can use the weather analogy You have bearish engulfing so price You overlaps the previous day or days of information in a negative fashion. That as dark clouds.
kevin-firari_1_05-24-2024_083856hmm. Mm hmm. Mm
david_5_05-24-2024_083855Be actually seeing, feeling the raindrops. And today would be that day that we're looking at for that type of information, we're not currently seeing. So there's times where you can see cloud cover, and it's just is what it is. It's cloud cover, and it doesn't turn into precipitation or some type of storm. It doesn't have to be a storm. Have to be. Another correction, like the one we saw in April, which was perfectly normal. We've reclaimed those highs, the largest 50 stocks, the large 100 stocks in the U S have reclaimed those highs we've seen strength. Those pieces of environmental information have not gone away, but it was interesting to see the market have basically a an 80 percent downside day. So 80 percent of the market having downside volume on a day where NVIDIA is up 10%. Using type of event to sell into, or it's just one of the biggest rotations we've ever seen where people are willing to sell it off everything else and buy into semiconductors. To be determined. We don't know the answer to that,
kevin-firari_1_05-24-2024_083856Not yet.
david_5_05-24-2024_083855but we will. That's why we use technical
kevin-firari_1_05-24-2024_083856I know, it's a great thing, right?
david_5_05-24-2024_083855We don't have to marry our opinions, right? We just get to marry our wives and enjoy that and raise our children. And with that time frame matters, right? Daughter's graduating this weekend and, old adage that the days are long, but the years are short is a timeframe question. Technicians are always talking about timeframe or, when we say we're in a downtrend what timeframe are you talking about? Or if we're in Are you talking about? Same thing with life, with our kids you're early in the timeframe, Kevin, sometimes taking care of a young child, the day might feel long, but before you know it, they're wearing a graduation gown and walking across the stage and onto a new chapter. And.
kevin-firari_1_05-24-2024_083856Mm hmm.
david_5_05-24-2024_083855That's life and it's a beautiful thing. And so the days are long and the years are short, and I would say the same applies to markets timeframe matters, we can't just get caught on Thursday's move. Thursday's move, meaning this bearish engulfing doesn't mean the next six months is negative. The only way we would know that is if we are clearing lows. So like the April lows, for example, those would be a good start to understanding if this is really a storm that's upon us. Where these divergences that we talked about previously were the harbingers, like the canaries in the coal mine, Below April lows, that would be the start of okay. might have a bigger downtrend in our hands and we're not there yet.
kevin-firari_1_05-24-2024_083856Right.
david_5_05-24-2024_083855We were going to keep this short and sweet. Didn't necessarily get a time to talk internationally. There's spent, there was pullback. We haven't broken any levels necessarily in that perspective. We saw dollar strength this week. The Euro USD continues to be an interesting consolidation that it resolves to the upside, that you might see a return to value. The Euro tends to trend in that direction, that you see value in small. And I would say the relationship of small caps versus S& P is at a really important level that goes back to, October, November of 23, where we saw all the breath for us, the massive expansion, that's where we're at with small caps versus S and P, meaning, is there an advantage to owning small caps? right against that level where you would say there needs to be there. The market's still making a decision on that on where the advantage could be. And, for example, small caps have not cleared their April highs or their late March highs. large caps have, and so does that mean a large cap summer? Are we breaking out the really big hats and it's led by semiconductors? I have no idea, but it's interesting to see where small caps are versus large caps. International continues to be strong. We could go sector by sector, but we're bumping up against the end of our time and I want to make sure that I highlight the supporter of our podcast. Which of the adaptive select ETF listed on the NYSC under ticker ADPV, which helps investors access to the most prevalent factors in markets, momentum and relative strength through proprietary identification methods. The adaptive select ETF on attempts to own the strongest 25 large cap stocks when the market is in an uptrend. And since not all market environments are the same adaptive select seeks to prevent extended declines by moving the short term treasury bills and cash during long term market downtrends. Investors can find out more, including how to invest in ADPV by visiting ADPVETF. com or calling 1 833 880 5200. I have no idea if people use their phones this way anymore, but They can call in investing involves risk, including possible loss of principle distributed by quasar distributors, LLC. So near the end of our podcast, anything else, Kevin, I really appreciate you doing this with me. But I want to open it up. If you have anything else you want to cover?
kevin-firari_1_05-24-2024_083856Holiday. Okay. Week next week
david_5_05-24-2024_083855Yes.
kevin-firari_1_05-24-2024_083856and you actually yeah, Jason. Oh, there's two holidays next week,
david_5_05-24-2024_083855Okay. Talk to me. I know Memorial day
kevin-firari_1_05-24-2024_083856right? Obviously the biggest one and really so but what's the next day after that also out it for me Anyway,
david_5_05-24-2024_083855for you. Are you off?
kevin-firari_1_05-24-2024_083856should be no, I mean it should be for everybody that has to do the markets
david_5_05-24-2024_083855It's not kick a ginger day, is it?
kevin-firari_1_05-24-2024_083856I wouldn't give you a heads up if it was I'm gonna ruin it. It's T
david_5_05-24-2024_083855is it?
kevin-firari_1_05-24-2024_083856plus one day, man
david_5_05-24-2024_083855Oh, yes.
kevin-firari_1_05-24-2024_083856That should be a national holiday
david_5_05-24-2024_083855We do have, okay, we got to give that a couple, we got to give that a couple of minutes because can you, okay, can you describe what does that say? What does that mean when you say t plus one? What do you mean by that?
kevin-firari_1_05-24-2024_083856Yeah, it's good because I think the last time I was on here too, I was getting pretty pumped about that. Trade settlement obviously not an instantaneous process even though it feels like it is. Believe it or not, shares and money changing hands actually takes a few days to sort out in the back alleys of the markets. Currently like your stocks, ETFs, non mutual fund securities for the most part are T plus 2. So just for easy math, if you will on a non holiday Monday, right? If you would buy or sell something, it takes until that Wednesday to settle. Now kind of mutual funds and equity securities are going to be on the same playing field where they'll actually settle the next day. So that, that makes, um, obviously, you get, if you're selling funds, you get access to those funds earlier. So I guess for some reason, if you have to wait until settlement to buy something else that can happen quicker. If you're trying to take the money in the form of a distribution, that can happen quicker. Like for us, depending on how models look, it makes that. Reg T settlement map. If we're fully invested a little less hectic, which is a win for everybody
david_5_05-24-2024_083855Yeah,
kevin-firari_1_05-24-2024_083856custodians and really don't have to police that as much necessarily. It shouldn't be as much of an issue.
david_5_05-24-2024_083855I think that's great. The analogy I would make is, imagine going to the grocery store, pulling up to the counter, And giving them your money and having to wait two days until you can take
kevin-firari_1_05-24-2024_083856Go back, pick up your groceries. Nah
david_5_05-24-2024_083855and now you get it to do it in a day, which, which sound ridiculous in a grocery terms. But this, all we know is we're stepping forward towards efficiency and we have our European brethren to get their act together, first and foremost, get your exchanges to communicate and then get to T1. Let's provide people who access markets even more efficiency than before. So yes, I'm with you. Not as important as Memorial Day.
kevin-firari_1_05-24-2024_083856not even close, but sure. Yep. Have a good holiday weekend and make sure you
david_5_05-24-2024_083855and I'll make this connection that those who died so that we might live free and the free men go and develop great things on behalf of their citizens. T plus one is one of those things. And because in America is great because of that, because it is a free place because of what other people were able to sacrifice to go ahead and make more efficient markets that you can even access markets the way you can. We talk about fractional shares, all those things. What a beautiful thing. What a beautiful capitalistic society everybody listening to this in the United States gets to be a part of is just wonderful. And it happens because. We had men and women that gave their lives so that we have that type of freedom. So I think they're interlinked. I'm with you. It's not, is not better than the other, but they're definitely interlinked. And I guess I'll leave it, the celebration of Memorial day is important. Sometimes people get Memorial day and veterans day confused. This is definitely that time to think about those who lost their lives. families that lost a loved one. And I'll just bring a quote from America. The beautiful. Oh, beautiful for heroes proved in liberating strife who more than self their country love. And mercy more than life. So find someone to thank, if a family that lost a loved one make sure you, you thank them for their, what their family sacrificed on behalf of their country. It's a beautiful thing. So Kevin, thanks for joining me on here. Should be back next week with Ian at fully rested, but thanks for doing this with me. I thought we covered a lot of good things for our listeners today. And if you love this, make sure you share it with your friends. All right. Thanks everybody. Have a great weekend.
kevin-firari_1_05-24-2024_083856wear your sunscreen.
david_5_05-24-2024_083855Love it.