Stock Traders' Almanac's Hirsch on AI masking troubles but spurring a boom

With the Federal Reserve meeting Tuesday and Wednesday, it's going to be a busy, frenetic week for the markets, but that doesn't mean you should take your eyes off the long term.

That is Jeffrey Hirsch, editor at the Stock Trader's Almanac. And if the Dow's going to hit into the 60,000 level in a few years, I think investors will be pretty happy no matter what the Fed does this week. But we start today's show with VJ Moria, chief investment officer at Regal Point Capital. He's Money Life's newest regular, with a feature we're calling The Week That Is — just the right thing to get you started on the new week. Plus, we've got Rachel Perez from Northstar Inbound talking about a survey they did for Rula about just how stressed out Americans are and why they're stressed out over the holidays. And David Trainer, founder and president at New Constructs, puts a familiar name back into the danger zone. Today's Monday. Otherwise, I wouldn't be wearing this 'I Hate Mondays' shirt.

Welcome to Monday. Welcome to Money Life. This is Money Life for Monday, December the 8th. Thank you so much for joining us. My name is Chuck Jaffy and I'm your host. And we do have all that stuff coming for you today. And I hope you're going to be pleased with what is our latest feature. It's something we've been working on for a little while. I don't think it's necessarily gotten to where we're fully sure of how good it can be yet. But if you are a longtime listener to Money Life, you know that I've always wanted to have something that kind of gave us the right kickoff to the week. And when the show started, we had Economy Watch with the folks from Hightower Advisors, who were a sponsor of the show. And it was always designed to be: here's what we might be looking at for the week ahead, etc., something to get you started.

We're now doing with VJ Moria a feature we call The Week That Is, and it really is to try to put a cap on the week that was, give you something to look for in the week that is — the week ahead — and then one extra thing that he's going to be taking a look at that could go in almost any direction on any given week. So we're going to debut that for you today. But the rest of this show is also loaded up, because Rachel Perez will be here talking about a survey. David Trainer takes us to the danger zone, and Jeffrey Hirsch is here today, kind of giving us his update on where things are with calendar effects and seasonal stuff, because that's really one of the things that they do really well and are particularly known for at the Stock Trader's Almanac.

Then he'll be back tomorrow talking about the Stock Trader's Almanac for 2026. It's part of what should be a big week here on the show, but it's also going to be a big week for the market, because frankly the Fed meeting this week is going to determine if investors feel like they have gotten coal in their Christmas stocking or something really good, because I think we get to new highs if the Fed does what we expect it to do, and if somehow they shock us then maybe not so much.

The Fed is widely expected to cut rates by a quarter of a percentage point for the third straight meeting, though it was only six weeks ago that Federal Reserve Chairman Jerome Powell basically surprised the market by saying an interest rate cut at the December meeting was unlikely to happen. What has changed? Well, the unemployment rate, because we had a delayed September jobs report. That was the first piece of important U.S. economic data released after the government shutdown ended. It showed that while the Fed was flying blind on data, the jobless rate kept going up, and it had gotten to 4.4%. That apparently is enough to convince Powell and a majority of his colleagues that another rate cut is justified.

So, we'll see what happens when the Fed meets this week. I suspect you're going to get the rate cut, and then you're going to get some warning that says there's nothing guaranteed about the next one, which is kind of par for the course. But I think the data may make it that much more likely that there's a little bit of concern over the next one. And of course, the Fed has the problem of if you fight unemployment and you lower rates, you might lose the battle with inflation. So, in spite of the employment numbers, let me give you a reason why you might say, 'Oh, wait, hold it. Do I want to see the Fed do stuff to try to help with the employment side of things?' All you have to really do is look at state unemployment insurance claims, right? Weekly claims for state unemployment insurance are a sign, if they're going up, that layoffs have begun. But they haven't been going up. They have stayed remarkably and consistently low.

Meanwhile, inflation has been above the Fed's 2% target for more than four years now. So, if you're asking me how I think the Fed is going to balance all this, I think what they're going to do is they're going to have a rate cut, and then they're going to say, 'We're raising the bar for the next rate cut,' because there's going to be just an absolute ton of new economic data before the Fed's next meeting at the end of January. You're going to get inflation and jobs from October and November. And because you're going to get all of that data and you've been doing without it, I don't think that Jerome Powell can say a whole lot, because if he says too much about, like, 'Oh, we're not going to cut rates,' and then the numbers come in and they show that the labor market's much weaker than otherwise expected, you've got no choice but to cut again. So, that's what I'm expecting we're going to see this week. We'll figure it out. It'll be interesting to watch.

Meanwhile, I'd love to get your take on what's happening with the Fed, what you think's going on. If you've got questions, comments, let us know what you think about the new thing that we're doing with VJ Moria and more. You can reach me at [email protected]. Don't forget we've got a contest going. You can still get in on that and much more. Right now, we have a show to get to. I've told you what's coming, and our newest feature kicks us off. It's The Week That Is, and it will be here right after this message.

Netflix plays the prices right with Warner Brothers. Precious metals are priced at record levels but still feel like a bargain. And parents may get a bargain on helping their children save for retirement. Welcome to The Week That Is. This is The Week That Is with VJ Moria of Regal Point Capital, where you get the upshot from last week, the jump on the week ahead, and some insight on what to keep in mind as it all plays out. I'm your host, Chuck Jaffy, but the star of this show is VJ Moria, chief investment officer at Regal Point Capital. VJ is a longtime observer of the markets and economy, and he's got plenty to say. And while he does some of that at vjmoria.com and on his YouTube channel, which is VJ Moria on Money and Markets, he's here to give us literally this, that, and the other thing. That is, what happened in the week that just finished. This is what's happening now and in the coming week. And the other thing is whatever comes into VJ's frenetic mind about what he wants investors to know. VJ Moria, what it is.

It's just another day in paradise. We're getting closer to the end of the year. Let's get it started and end the year right, Chuck.

And we are just starting The Week That Is — that's both The Week That Is that we're living through and The Week That Is podcast. But what we're going to try to do as we develop this bit that we're doing is we're going to start with what it was. And what it was last week at the end of the week was that deal with Netflix and Warner Brothers.

Wow. What we just witnessed was a bidding war. And I think, ladies and gentlemen, this is going to continue. M&A is going to grow. And what we're talking about today is some of the biggest names in the content business. And Netflix came out with a cash plus stock offer valuing the company at an enterprise value of about 80 billion, market cap of about 72 billion. They expect it to close next year. Let's talk about the reasoning. What's going on? Why do I expect more M&A and LBO activity? You guys are probably tired of hearing talk about the Fed, but guess what? Have a cup of coffee, because the Fed is the main motivator. And we know now that there's an 87% chance the Fed's going to cut rates soon. This is going to help fund these massive LBOs. Massive, guys — 59 billion dollars of debt in this one transaction. Because guess what, ladies and gentlemen, content is still king, and content beats construction. Let me say that again: content beats construction.

Here's why I say that. I have had experience as a real estate developer. We have private equity funds which have built Marriott-branded properties across the southeast U.S. We're trying to beat inflation. Now, content is similar. When you build content, you're creating a revenue stream, but a beautiful thing about content is that there's no maintenance cost. But what you guys need to understand is that it's not your father's Oldsmobile. Real quickly, let's talk dollars and cents. Warner Brothers, with an amazing library of intellectual property — if you really look at their net income per employee, they're not making that much per employee. But Netflix, man, these guys are the future. These guys used to send you DVDs. They don't do that anymore, because guess what? They woke up, they smelled the coffee, and they decided to adapt because they wanted to survive. And now they are kings of content. And Netflix, even though people will say, 'Oh, they're overvalued. Look at the PE ratio' — guys, they make a net income per employee of over 700,000 dollars. 745,000 dollars of net income per employee. Chuck, is that not ridiculous?

I don't necessarily look at revenue per employee as a metric.

No, this is net income. I'm sorry to interrupt you there, but nobody's looking at this. Well, it's a very unique metric. It's one that my partner Vundan Desai and I started looking at recently. And this company beats Goldman Sachs in terms of its profit per employee. So, this is not the amount of money that they're paying their employees. This is their net income divided by the net employees that they have.

And like I said, very interesting metric that I'm not familiar with, but I want to take that, and my audience knows you from having done the Money Life market call, and at Regal Point Capital, you've got your five lens approach. So, quickly, when you look at Netflix in the process of purchasing Warner Brothers, given what you believe can happen and the fact that content is king, but you're also taking on this much debt — is Netflix going to be a buy? Like, hey, you're taking on this debt to do this. Is this a company that you're going to be looking at saying, 'Yes, I want to keep riding this train,' or can you not say that yet because of the debt that's in there?

My short answer is yes. We want to own Netflix over the long run. Now, please do not be impatient. I am not expecting any kind of rapid rally in Netflix. If anything, the opposite is true. I would not be surprised if Netflix gets punished — not because they made a wrong decision, but because, guys, we're all humans, right? Or even our algorithms are programmed, hopefully, by humans or AI algorithms that were once created by humans. The point is this: Christmas, the holidays are coming up, year-end performance numbers, all of that stuff. So, people are going to take chips off the table. I think Netflix long term — and when I say long term, I'm talking about three years, at least 18 months, okay? — but I think Netflix is going to win. And here's why. They are going to make the business more efficient. Netflix is going to use and utilize technology, and they're going to get rid of all the dead weight. If you work at Warner Brothers or for a subsidiary and you don't use your brain and you work less than 40 hours a week, you need to update your resume.

Let's move from the big deal of the week to what has been the big deal of the year, that being gold and precious metals, because we're closing in on the end of the year, as we've already said, and we've got gold at record highs. So, for you, as you're looking at precious metals, can they continue this run? Especially in an environment where we're about to see rate cuts.

The rate cuts, if anything, they're a reason why precious metals have been rallying. And when I say rallying, guys, nothing has beat precious metals. No asset class has been beating them this year — not your crypto, not your AI. Precious metals are a signal and a sign. We're talking about silver up 102% year to date, approaching 60 dollars. I think it was 58 last time I checked. Gold is over 4,200 dollars, up 60% per year. The NASDAQ is up maybe 20%. The Dow and the S&P are up less than that. But all asset classes have gone up, which is, once again, inflation. Guys, if you keep creating more money, more credit, and credit acts and spends like money, then you will see inflation. And inflation expectations are still high. That's why I strongly recommend you must own assets that are going to be protected from inflation, because it's not going away.

Now, let's move from the story that was the deal for Netflix and Warner Brothers, the story that's going to be this week, which is everything that's happening with gold in light of what we expect to also hear from the Fed, to what's next. And we got a taste of what's next when the headlines included stories of Michael and Susan Dell donating 6.25 billion dollars to be given in Trump accounts. And Trump accounts are a brand new thing — you can't actually open one just yet. But for people like my daughter, who had a baby this year, my first grandson, you can be looking to get Trump accounts, which will be seeded basically with 1,000 dollars. The Dell donation goes further than that. But this is hoping that it'll be something of a game changer, because this is really more about how do you help a child save for retirement, and maybe make it that you don't need to be slogging your entire life, and if you don't start saving in a 401k the minute you have your first job, you're going to struggle to get there.

Chuck, I think that this is such a great idea, and I'm excited like you are. Congratulations, by the way. But guys, if you remember why we were so excited about Roth IRAs, or before that 401ks — you want to defer the negative, which is taxes, right? So something that's tax-deferred, or it'd be even better if it was tax-free. They're going to put a restraint on that. They don't want Bill Gates putting money into a Roth IRA every year. So they're going to put income restrictions. The beauty of this potential Trump account is that it would allow 5,000 dollars of contribution from different entities — a company, a family — and again, it would allow for the compounding effect, which is the beauty. And just imagine if a Roth IRA is the most important thing you could do when you're a working adult, just imagine what a few thousand dollars could do when you're not even an adult.

I have imagined it, VJ, because when my kids were little — my own children, who are now in their 30s — I opened stock accounts for them. They were not tax-deferred at all. With my grandson, Declan, well, I'm going to do that, and I'm going to wind up opening a Roth IRA, because we are in the media business. We've compensated Declan for his voiceover talents.

Amazing.

And that means that I was able to give him — in spite of maybe some objections there — a Roth IRA, which is a better tax savings vehicle, because of course it grows tax-free forever. Now, I will be paying the taxes that he would owe on the income that he's getting this year, and etc. But the Trump accounts, they're an option. It is going to give people some flexibility and some tax benefits. But it's not clear for some people whether or not it will be better than a 529, because a 529 can be used for college, and you may want to be saving, depending on where you are, for college when the kid is going to need it, so that they can maybe fund their own retirement rather than saving for retirement.

You know, I was actually thinking the same thing. Although I don't have proof in front of me, the way that my team explained it to me is that it would have Roth-like features where, for education purposes, you would still be able to withdraw. So, all I would say is that the potential advantage over the 529 — I don't know if you've looked at the 529 investment options, but a lot of times it's just a bunch of mediocre mutual funds with high expense ratio wraps. And that's not me trying to take a poop on the investment firms, but I just think more options don't hurt you unless, like, you know, you're in an aisle for tea flavors or whatever.

My kids, trust me — my daughter and son-in-law will definitely sign Declan up for one. And this Michael Dell money is going to make it that a lot more people — kids who are not just being born now, but children up to the age of 10 at about 75% of the country — they will get 250 dollars out of the Dell monies if everything goes according to plan. So, it'll be interesting to watch. VJ, we're off to an interesting start on The Week That Is. Thanks so much. We'll see you again next week.

Chuck, God bless you. Thank you. Happy holidays to everybody that's listening, and good luck.

VJ Moria is Money Life's newest regular. He's going to start us off every Monday with The Week That Is. He's the chief investment officer at Regal Point Capital, which is online at rpcapsolutions.com. You can learn more about him and find his blog at vjmoria.com. Check out his YouTube channel, VJ Moria on Money and Markets. Up next, a quick survey conversation with Rachel Perez talking about holiday spending. Then we go to the danger zone. And then we'll be talking with Jeffrey Hirsch from the Stock Trader's Almanac. So stick around — we're living the money life, and we're just getting started.

Now let's take a look at what the survey said. Welcome to The Survey Said on Money Life, where we dig into surveys, studies, polls — any kind of research that's going to help us understand what people are doing for, with, and about their money. And today we're looking at when their money becomes, well, maybe a little bit of a strain or a stress during the holidays, because there's been a survey done for rula.com that looked at 40 U.S. cities and how the people there cope when the most wonderful time of the year isn't so wonderful because of what's happening with costs. And so while they did it city by city, and if you go to rula.com or you just go find the link that we've got to this survey — which you can find in our show notes for today's show — you will see that you can check it out city by city, but you can also take a look at it on a national level. That's what we're going to do. But the fact is, people are stressed out with just how much the holidays are going to cost them, and how much they're going to blow their budget by, and more. Here to discuss it all, Rachel Perez. She's a spokesperson for Northstar Inbound, which did the research for rula.com. Rachel, it's great to have you back on Money Life.

Thank you so much for having me, Chuck. Always a pleasure.

I'm never surprised when I find out that people are talking about how much this stresses them, but I do have a question about the research here. Do people recognize how stressed they are when they're not being asked about it? I know people that would never volunteer like, 'Ah, the holidays, they're freaking me out this year because they've become so expensive.' Yet if I asked them, 'How are you doing for the holidays this year? What's going on?' they'd be like, 'Oh, you know what inflation is, right? You've been watching the headlines.' So, how much of this is real versus perceived? Like, your study shows that Americans are going to overspend by 261 dollars this year. And on the one hand, that's a lot of money for a lot of people, and on the other hand, that's not a lot of money for a lot of people. So, how real is the stress here?

For our study, we specifically did set out to find out what exactly was stressing out Americans over the holidays. So, this is definitely, you know, people telling us what personally has stressed them out. And we actually asked them to rate their typical stress levels on a scale of 0 to 10. And then we asked them specifically about what aspects they find to be the most stressful. So, I think you're right in saying that, in an average conversation, maybe people aren't thinking exactly about how much they'll be overspending, but when they sit down and they look at the numbers, or when they're asked about it, they come to realize, 'Oh, no, this is actually going to be potentially a problem for us this year.'

I mentioned 261 dollars. That's the overspend, but do we know what they're expecting to spend? Like, is this only in relation to their budget, or do we also know where they're spending and how much they expect to spend, or how much they budgeted?

Yes, so this is directly in relation to their budget. So we asked, given your personal budget, how much do you typically tend to overspend? And then we also asked them specifically what items would cause them the most stress when it comes to spending. So, for example, 75% of our survey respondents said that the actual cost of gifts was going to be the thing that stressed them out the most. And then we also asked them about, like, the cost of hosting. And so, one in three Americans said that the cost of hosting was going to be what stressed them out the most this holiday season. So, this was specifically about their personal budget and how much they intend on spending, or they perceive that they will be spending above what they personally have budgeted.

I'd have to do the math to figure out — like, if you said, 'Okay, I'm going to be 250 dollars over my budget,' I have to figure out what my budget was first, and then figure out if I was going to get there. Some of the spending I question, because, for example, 30%, as I read it, said that travel costs outside of flights are causing stress while traveling during the holidays. Is travel considered a holiday cost? I mean, 75% were saying gift costs stress them out. So, is it just whatever you spend? Like, I would imagine people are not saying, 'Oh, food costs stress me out,' but you are making a big meal potentially, or what have you — you're feeding a lot of people if your family's all coming. So, how much of this is the spending outside of gifts for the holidays?

For the travel costs specifically, we were asking more so about the cost of things like potentially renting a car, or, let's say, the cost of having to buy things at the airport, or having to get a train ticket. You know, we also asked specifically about flight prices, but we just asked individually each person to kind of list on a scale of 0 to 10 how much they are stressed out by certain financial aspects of the holidays specifically, and other aspects as well.

Is there anything people can do to reduce their stress? Because if you reduce your spending, that would reduce your stress — except for the fact that it would create stress about: have I done enough? Have I been generous enough? Am I going to be seen as a cheapskate, etc.? So there is the stress that comes with 'did I not spend enough,' isn't there?

Yes, there is that stress. So we also asked in our survey specifically what Americans have done successfully in order to mitigate the stress as it pertains to finances. And for over half of Americans — so over 50% of the people in our survey — they actually said that planning ahead, like a few months ahead potentially, is the number one way that they were able to eliminate the financial stress. Saving money, putting a bit of money away so that they could spend what they wanted to be able to spend at the holiday season — you know, not feel cheap, not feel like they're not being generous — but at the same time, they don't have these sort of last-minute financial costs that are going to put them over the edge, or put them, you know, on average, 261 dollars over their budget.

Which also means that anybody who didn't start planning for this year until now — and we're talking, of course, after Black Friday and into the heart of the holiday season — the best way to reduce stress in this case is just to not worry about it, because you're kind of stuck, aren't you?

Right. I mean, it's definitely going to be a lesson for potentially next year. But at this point, you know, the best way to reduce the stress would be to try and find as many deals as possible. Luckily, a lot of companies continue to offer promotions leading up to the holidays. And yeah, I mean, still, like, 61% of Americans do say that overspending unrelated to gifts, unrelated to travel, continues to stress them out even into the holiday season. So there are certain things that just cannot be planned for, and that happens to pretty much everybody.

Yeah, but you can plan around the holidays. You can do things to reduce the stress, and obviously, if you're feeling stressed, take care of that. Rachel, really interesting stuff. Thanks for joining me on Money Life to talk about it.

Thank you so much for having me, Chuck, and happy holidays.

Rachel Perez is spokesperson for Northstar Inbound, which did this work for rula.com. Again, you can go directly there, or you can find the link directly to the most stressed holidays study by going to our show notes or looking on our guest page. And don't stress out about Money Life, because we'll be right back with more.

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If you're looking for trouble, you've come to the right place. You're in the baddest biker bar in the investment world — the danger zone.

Yes, welcome to the danger zone on Money Life, where we get the latest take from the experts at New Constructs, where they evaluate securities on a scale of most attractive to most dangerous. They do it by bringing together discounted cash flow analysis and forensic accounting. They dig in at the footnotes level, work their way up, looking to see where the situation is misleading. Now, misleading could be good — if something is misleading but it works in your favor, it means something's undervalued. Well, that would make something attractive. That's not what we focus on here. We're looking for the stuff where the mispricing makes something dangerous. Learn more about how it works by going to newconstructs.com. David Trainer is founder and president at New Constructs. David, welcome back to Money Life.

It is great to be back, Chuck. Thank you.