Smart Investing with Brent & Chase Wilsey

Brent & Chase Wilsey
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Smart Investing is the radio show where Brent and Chase try to make investing easier to understand. They demonstrate long-term investment strategies to help you find good value investments.

  1. 6D AGO

    April 3rd, 2026 | Oil Prices, SpaceX IPO, Jobs Report: What It Means for the Economy, 2026 Tax Payments & More

    How much could inflation increase because of surging oil prices? It is hard to know exactly how much the increase will be, but we do know it will be increasing because since the Iran war started February 28th, a barrel of oil has increased from around $70 a barrel to around $100 a barrel depending on the day. Economists estimate that the March CPI inflation number could be around 3.4% and may hit 4% in April. If the conflict continues through summer and into the fall, we could see inflation hit 5%. While this is a possibility, fortunately, it does not appear that will happen. One would have to go back 20 years to see this type of rapid increase in gas prices. The Fed has been trying for five years to get inflation down to 2% with no success, and it does not appear that it will happen this year, which means interest rate rates will probably remain around the current level for the remainder of this year. This will be tough on the economy because mortgage rates won’t be coming down as we expected, and people may not be doing that remodel on their home because home equity lines will still be high. Some may just say I want to get this done and just go ahead and accept the higher interest rate, but I believe most will choose to continue deferring the project. The good news is, I don’t believe this will last much past May or June because the President knows this would be very tough on the economy and the midterm elections are approaching quickly. So, currently we’re still saying this is a short-term problem and any pullback in good quality businesses that don’t have high valuations is a good buying opportunity.   You may finally be able to invest in SpaceX! Bloomberg and CNBC’s David Faber reported that SpaceX has confidentially filed for an IPO with the Securities and Exchange Commission, also known as the SEC. It’s estimated the company could see a listing around June and that it is seeking a valuation of $1.75 trillion, which would lead to a record public offering. Don’t forget that SpaceX merged with Musk’s X AI, which also owns X and used to be Twitter, back in February. At that time the combined entity was valued at $1.25 trillion. Following a SpaceX IPO, Musk will become the first person to sit atop two separate trillion-dollar public companies. This IPO would also likely help increase Musk’s net worth, which is estimated to be close to $840 billion. Most of Musk’s net worth comes from his estimated 43%stake in SpaceX and 13% ownership of Tesla. I would have to assume this IPO would be well received given all the excitement around space, AI, and Elon Musk. This company is not just built around hype given its contracts with NASA, the Air Force, and Space Force. It also conducted 165 orbital flights over the course of 2025 and operates the Starlink satellite internet service, which runs on a constellation of around 10,000 satellites in lower-earth orbit. With that said, my guess is the stock would push higher in the public markets to lofty levels that would make it dangerous as a long-term investment. There’s also speculation that we could see IPOs for Anthropic and OpenAI this year. I do believe these mega IPOs could cause problems for stocks like Tesla, Nvidia, and Microsoft as there is only so much available capital and investors may sell those positions to a get a piece of these new exciting stocks. This should be an exciting year for the IPO market.    Maybe the labor market isn’t as bad as people think Coming off a weak February report where payrolls declined by 133k, March showed a nice increase of 178k jobs. Part of the volatility was due to a strike at Kaiser that led to job losses in February, but then a surge of 76k jobs in the health care space in March. Health care continues to be the driving force for the labor market, but construction was strong in the month as the sector added 26k jobs and transportation and warehousing saw a nice increase of 21k jobs. The government sector continues to weigh negatively on the headline number as federal government employment declined by 18k jobs in March. Since reaching a peak in October 2024, federal government employment is down 11.8% or 355k jobs. Financial activities also saw a decline of 15k jobs in the month and the other major sectors like manufacturing, information, and leisure and hospitality saw little change in the month. While I wouldn’t say the labor market is booming, considering the unemployment rate is sitting at 4.3%, which was down from 4.4% last month, I’d say maintaining the labor market at these levels would be extremely healthy for our economy. I remain optimistic that both the labor market and economy will remain in a good spot for the rest of 2026.   Financial Planning: Setting Up 2026 Tax Payments With Tax Day approaching, it’s important to think not just about your 2025 tax return, but also about planning for 2026. In the U.S., taxes must be paid throughout the year either through withholding or quarterly estimated payments, and while your 2025 balance is due April 15, the first estimated tax payment for 2026 is also due on that same day. This matters especially for income like interest, dividends, capital gains, business income, and rental income, which typically don’t have automatic withholding and therefore require estimated payments. If you don’t pay enough during the year, the IRS will charge both interest and underpayment penalties on the shortfall. To avoid interest and penalties, you generally need to pay at least 90% of your current-year tax, 100% of last year’s tax, or 110% of last year’s tax if your AGI is over $150,000.  Since projecting the current year tax can be unreliable when income is variable, a simple way to stay on track is to use last year’s tax as a baseline since it’s known and easy, and if you fall behind, you can catch up by increasing withholdings from wages, pensions, or retirement withdrawals since withholdings are treated as if they were made evenly throughout the year, regardless of timing.    Companies Discussed: Snowflake Inc. (SNOW), Snap Inc. (SNAP), Alcoa Corporation (AA) & Boston Scientific Corporation (BSX)

    56 min

  2. MAR 27

    March 27th, 2026 | Stagflation and Bank Stocks, Meta and YouTube Court Ruling, Higher Gas Prices and Auto Sales, Crypto and the U.S. Banking System & More

    Is the concern of stagflation putting downward pressure on bank stocks? The term stagflation was first used in 1965 by a British politician. A quick definition for an economy with stagflation is when there is slow economic growth, high unemployment, and high inflation. A scenario like that would put a strain on banks because as people lose their jobs one of the first things they stop paying on are consumer loans like credit cards and personal loans. Banks can also get squeezed because they may have locked in long-term loans at lower rates and because of high inflation, the Federal Reserve could increase short-term interest rates, which would compress margins. The banks also need meet certain liquidity requirements, which could hurt margins even more. On the bright side, this could be a buying opportunity to invest in banks since they are down roughly 9 to 10% since the beginning of the year. The reason I think this could be a good opportunity is manyfold. First off, the high oil prices that are currently causing inflation concerns appear to be a short-term problem and I believe they should start reversing by May or June. Second, employers have slowed down on hiring new people but are reluctant to let employees go because it’s very costly to hire new employees. Third, the economy appears to still be doing well and consumers have already started receiving part of the $50-$60 billion in tax refunds from the Big Beautiful Bill, which should help with consumer spending. This is also the year where agreements from other countries to invest trillions of dollars into our economy should start taking place. In regard to the banks themselves, they’re sitting in a pretty good situation with diversified businesses as your mega banks like JPMorgan and Bank of America have trading houses and global markets that are growing in the low double digits. Some banks expect mid-teens growth in the trading business. Some of the bankers have also said that demand for traditional commercial loans has been improving so far this year. In its most recent data, the Federal Reserve showed commercial industrial loans were up 5% year over a year, which is the largest increase since 2023. As always with investing, you should be looking out at least 2 to 3 years. One other perk is many banks pay a decent dividend around 2% to 2.5%    Meta and YouTube get screwed in court I was very disappointed to see that a 20-year-old woman, who won in a California court, is set to receive a total of $6 million from Meta and YouTube. Her claim was she was addicted to social media, and it dominated her life for years, which caused mental health issues like anxiety and depression. I’m really getting tired of the legal system in California and the theatrics played by attorneys such as her attorney having a jar of 415 M&M’s saying each M&M represented $1 billion of the near $400 billion in total stockholder equity when looking at Alphabets value. He began to remove one M&M at a time and demonstrated how taking out a few M&Ms did not change the weight of the jar. My feeling is this attorney should go to Hollywood and try to get an acting job. It is disappointing to see how no one wants to take accountability for their actions any longer. They want to blame somebody else and not take responsibility for the fact that she uploaded more than 200 YouTube videos before the age of 10 and had 15 Instagram accounts before she was 15. I do have to ask where were the parents? This could just be the beginning as there are 3000 other similar lawsuits against social media companies that are pending in California courts. I do believe there should be some changes made to the regulatory framework around social media, but this goes too far and is just in my opinion greed from attorneys and people trying to get a free ride. I was glad to see that both companies are appealing the decision, and this will likely continue to move up the court system and may land in the Supreme Court. Meta also lost a case in New Mexico this past week as jurors found that Meta willfully violated the state’s unfair practices. The state’s Attorney General claimed the company failed to properly safeguard its apps from online predators targeting children. It is disappointing to see the number of lawsuits that are going on in our country. Our country was not built on attorneys and lawsuits; it was built on people working hard and taking responsibility for their own actions. I do fear for my grandkids if we continue on this path and wonder what our country will look like in 30 or 40 years. When it comes to investing, I would be very careful in this space, as these cases could set a dangerous precedent for trials to come. There is also a federal trial set to begin this summer in the Northern District of California involving claims by school districts and parents nationwide that apps from Meta, YouTube, TikTok and Snap helped foster detrimental mental health-related harms to young users.   Will higher gas prices hurt strong US car sales? Current US car sales are around 16 million on an annual basis, which is down from 2019 when they were 17 million, but overall, they are still very healthy. The car business has changed from low margin vehicles to more luxury vehicles with higher profit margins and the average price on a new car is now over $50,000. The car buyers themselves have changed with the average new vehicle buyer around 50 years old. This is seven years older than in the year 2000. It’s no surprise, but because of the higher prices for cars, people earning over $150,000 a year account for 42% of the sales. Six years ago, it was just 29%. It was also reported that buyers who have incomes of $75,000 or less are no longer buying new cars because of the affordability. The higher gas prices do not seem to be affecting car sales at this point and according to the manufacturers, they are still saying the buyers remain resilient. However, if gas and oil prices remain at current levels that would then likely put a strain on car sales. Fortunately, at this time, based on many factors, I think by May or June we will start to see the easing of prices at the pump. Also helping US manufacturers is the deductible interest on cars made in the US. There are restrictions on this, but that does also help ease the pain with a little tax deduction. Also, since the President ended the tax credits for electric vehicles, US car manufacturers were able to scrap the losing endeavor of trying to build profitable EVs. With the stock prices for car manufacturers down around 9 to 10%, I believe the investment clouds should be clearing in the next couple of months and investors may have an opportunity to invest in a good US car manufacturer. It’s important to remember that if you step in and buy here, you own a small piece of a large company and don’t worry about the day to day volatility, you should be focusing on where that business will be at least 2-3 years down the road.   Should crypto companies be allowed into the United States banking system? Unfortunately, Jonathan Gould, who is Comptroller of the Currency and is one of the country’s most powerful bank regulators, believes so. He thinks it’s a good idea to let firms like Ripple, Crypto.com and others in this area to become a trust bank. A trust bank is a little bit different than a normal bank because they don’t take deposits or make loans and instead offer other services like safekeeping of various assets. An example of trust banks would be insurance companies and payroll processors. My concern is what the average consumer may think as they could believe that because it’s a trust bank it is automatically insured by the federal government. This is a gray area as some trust banks can have insurance from the federal government, but they do not insure investments like stocks bonds, and cryptocurrencies. The Bank Policy Institute and other banks are against this because it is unclear what these crypto companies would do with bank charters. There is talk that some applicants may want access to the Federal Reserve payment rails, which would allow them to move money between digital currencies and the banking system. My concern is this could jeopardize the strength of our banking system and cause our federal government to be on the hook for some big financial liability in the years to come as some cryptocurrency drops dramatically or fails.   Companies Discussed: DICK'S Sporting Goods, Inc. (DKS), Best Buy Co., Inc. (BBY), Signet Jewelers Limited (SIG) & CF Industries Holdings, Inc. (CF)

    56 min

  3. MAR 20

    March 20th, 2026 | Bank Stocks Hit by Private Credit, Youth Sports Boom, Aluminum Prices Surge Beyond Oil, U.S. Oil Inventories Rise, Create a Tax-Free Account for a Child & More

    Bank stocks feel the pain from private credit You may have noticed that the bank stock index is down about 10%, which is more than the S&P 500’s decline of 3% at the beginning of the year. It is estimated that banks made roughly 10% of their total loans to non-depository financial institutions known as NDFIs, which includes private credit companies. It’s also estimated that these types of loans in the past three years have grown from $1.1 trillion to $1.9 trillion. The banking stocks may struggle for a few more months, but the good news is a recent study from the Office of Financial Research found that private funds and BDCs, which are Business Development Corporations, use lines of credit and currently they’ve only used about 50 to 65% of the buying capacity. The tough decision for the banks is do they cut off the line of credit now or do they take on more risk and let those lines of credit increase to 70 or 80%? I feel I hope they stop it now because the risk I think is too great going forward on these private loans. We do hold two banks in our portfolio, which means we may see little to no gain in those stocks in 2026 due to the concerns around private lending. However, we do invest in companies for the long term and understand that difficulties can arise and cause a down year for any company. Long-term I don’t believe this will have a major impact on the financial situation for most of the bigger banks.   The big business of youth sports I remember growing up and wishing for a baseball or maybe a football for Christmas so I could go down the street and play with my friends. Fast forward to today and youth sports are a multibillion-dollar business for companies. The average American family spends $1,000 on sports per child. Whenever there’s an opportunity someone or some business will step in and fill the void, Dick’s Sporting Goods has helped fill this void. Dicks opened back in the 1940s by a gentleman name Richard Stack, who had the nickname, Dick. His grandmother had $300 cash in her cookie jar and that is what Dick used to start a fishing supply shop in Binghamton, New York. There are now more than 700 stores across the country and their newest concept known as Dick’s House of Sport is expected to have around 100 stores by the end of next year. These are mega stores that are 150,000 square feet, which is three times the size of a normal store. In these mega stores you will find batting cages, climbing walls, golf simulators, and even fields to run around to test out your new cleats. Dicks have been doing well considering it saw revenue skyrocket to $14.1 billion last year. This was twice what it was 10 years ago, not a bad feat for any company.   It’s not just oil; aluminum prices have been surging! With the recent war in Iran, the rising price of oil and gasoline has been quite noticeable and has been discussed heavily by various news outlets. One lesser-known impact from the difficulties within the Strait of Hormuz is the price for aluminum has surged. People may not notice it since they don’t necessarily buy aluminum directly, but if the problem persists you could see price increases for your favorite six pack of soda or beer. Outside of packaging, aluminum is also used across electronics, construction, transportation, and solar panels. In 2025, the Middle East accounted for roughly 21% of unwrought aluminum imports, which is the raw, unprocessed metal, and 13% of wrought aluminum imports, which is aluminum that has been mechanically shaped into sheets, rods, or other finished forms. Due to supply concerns, the price of aluminum has now increased to 4-year highs and there are concerns it could push even closer to $4,000 per ton from the current price around $3,400 per ton. Aluminum is the most abundant metal on earth, but production has slowed with locations like Bahrain’s Alba cutting production by 19%, this location is home to the world’s largest smelter. Unlike oil, China could have a huge impact when it comes to producing aluminum. China is already the biggest producer of aluminum, but to try and reduce emissions and prevent overcapacity they keep production constrained. They currently have several idle smelters that could be restarted if they feel aluminum prices are too high. Like we have said with the price of oil, I don’t see this as a long-term problem, but the longer supply is constrained for these input costs, the more problematic it is for inflation.   Surprise, US oil inventories actually increased I know what you’re thinking with the price of gasoline and oil increasing, oil inventories must be declining. Fortunately, that is not the case. If the inventories were decreasing the price of oil and gasoline at the pump would probably be even higher. For the week ending March 13th, crude oil inventories rose by 6.2 million barrels to 449.3 million barrels. This does not include the Strategic Petroleum Reserve (SPR). Everyone including the analysts thought for sure there would be a decline and the estimate was for a decline of around 40,000 barrels. Gasoline inventories did fall by 5.4 million barrels to 244.1 million barrels as of March 13th, but that inventory level is still 3% above the five-year average for gasoline inventories. If the inventories remain high, we could see the price of oil and gasoline begin to decline in another couple weeks or so. It will not go back to where it was a month or so ago, but we should hopefully start seeing a decline back to more normal levels soon.   Financial Planning: How to Create a Tax-Free Account for a Child A powerful way to build tax-free wealth for a child is by strategically using the kiddie tax rules with investments that generate qualified dividends and long-term capital gains. Under the kiddie tax, the first $1,350 of investment income is tax-free, and the next $1,350 is taxed at the child’s rate, which for capital gains and qualified dividends is typically also 0%. This means a child can receive up to $2,700 of investment income each year with no federal tax. Income above this level is taxed at the parent’s rate, which may be 15% or 20%. While $2,700 may not seem like much, it can support a surprisingly large portfolio because dividend yields are typically low and capital gains are only recognized when assets are sold. For example, a portfolio with a 2% dividend yield would not generate $2,700 of dividends until it reaches about $135,000. While the account is below that level, capital gain harvesting can be used each year to bring total income up to $2,700, allowing gains to be realized tax-free while increasing the cost basis. Because this involves realizing gains (not losses), there are no wash sale restrictions, and investments can be immediately repurchased. By consistently harvesting gains over time, the child can build a portfolio with minimal tax drag and potentially access those funds later with little to no capital gains tax, especially if they continue the strategy after they are no longer subject to the kiddie tax.   Companies Discussed: Super Micro Computer, Inc. (SMCI), SL Green Realty Corp. (SLG), Public Storage (PSA) & The Campbell's Company (CPB)

    56 min

  4. MAR 13

    March 13th, 2026 | Private Credit Woes Continue! Prediction Markets Hitting College Campuses to Find Gamblers, Price of Oil, the IEA Agrees to Historic Oil Release, Gen Z Going Back to the Mall & More

    Private credit woes continue! Investors continue to worry about the private credit market and this week has been filled with troubling news from the sector. According to the Financial Times, Glendon Capital Management said private credit funds run by Blue Owl (OWL) and several of its peers may have understated loss rates in their portfolios, suggesting actual losses could be higher than reported. This has led to concerns around the “true valuation” of these assets. This wouldn’t be surprising given the little clarity that we have for these loans. We also saw JPMorgan Chase take a conservative approach and mark down the value of some loans tied to private credit vehicles. All the negativity has now caused investors to question the long-term viability of this investment, and many are now wanting to redeem their shares. The problem is these companies don’t have to give you all your money back when you ask for it. Blackrock, Morgan Stanley, and Cliffwater all had to curb withdrawals as requests exceeded the pre-existing limit, which normally looks to be around 5%. Looking at Morgan Stanley’s North Haven Private Income fund in particular, redemption requests totaled 10.9% of shares outstanding in Q1 and the fund said it would honor 5% of those requests, which is roughly just 45.8% of each investor’s tender request. This now means those investors have to continue holding the fund until next quarter and can try again at that time to sell additional shares. I also recently learned of a term in the private credit space called Paid in Kind interest, also referred to as PIK. It is essentially an IOU that borrowers give to lenders instead of cash. When this occurs, the borrower’s debt just increases by the interest due rather than the borrower needing to make an interest payment. The crazy thing is that these PIK receipts are still counted as interest income and it counts towards the management fee. An analyst by the name of Ron Kahn, who runs a unit at the Chicago investment bank Lincoln International that does valuations for about a third of all U.S. private credit loans, wondered why private credit companies were showing such few defaults. What he found was lenders were proactively amending loan agreements by allowing PIK interest rather than cash payment so they could avoid default. Lincoln International saw private credit loans with PIK interest rise to 11% at the end of 2025, which was up from 5% in early 2022. There are many concerns in this space right now and I’m sure glad I don’t have any assets in this space!   Prediction markets are hitting college campuses to find gamblers Prediction markets have something FanDuel and DraftKings don’t, access to the 18 to 21-year-olds in college. Gambling is generally limited to adults 21 years or older, however, prediction markets that are run by companies like Polymarket and Kalshi are trades that are regulated as financial derivative contracts by the Commodity Future Trading Commission. This allows anyone 18 years or older to gamble using these prediction markets. Both Kalshi and Polymarket are hitting college campuses across the country and throwing cash around to lure in 18 to 21-year-old students to place bets via the prediction market. They are doing this by using fraternities and even campus clubs to promote their platforms and in some cases, they pay them $10 per each new account they sign up. There was one fraternity who received $30,510 in two weeks which the fraternity used for parties and new furniture. They are also using student influencers as brand representatives to sell other students on the prediction market. These two companies have no shame as they have even used college athletes to influence others to bet on sports with prediction markets.   Don’t pay attention to the price of oil on a daily basis I say that because there’s so much speculation out there and likely the information you receive on the price of oil is useless when you look forward to a few months and maybe even just a few weeks from now. Last week the price of oil surged around 35%, but on Monday after comments from the President that this will not last long in the Middle East, crude oil fell back down to under $85 a barrel. Why is this volatility in the price of oil happening?  Roughly 20% of global oil consumption is exported through the Strait of Hormuz and about 20% liquefied natural gas exports worldwide also pass through the narrow waterway. The United States over the years along with other allies have spent billions of dollars making sure the waterway remains open. At the smallest part it is only 21 miles across and to the northeast there sits, Iran. Officially the waterway is not closed or blocked physically, but there are concerns of going through the strait for fear of being hit by a missile shot from Iran. The other concern is how long this will go on because storage facilities for oil have pretty much reached full capacity and when that happens the producers need to turn off the well in a process known as “shutting in” occurs. When this happens, there can be problems and delays turning the wells back on and some may not regain the original flow. As you can tell, it is not a simple process and it’s not just oil that’s goes through the strait but also liquified natural gas and even large amounts of fertilizer flow through the area as well. I would not recommend making any investment decisions during this time around anything that has to do with oil or even energy for that matter.   The International Energy Agency (IEA) agrees to historic oil release The IEA, which is an organization of 32 member countries primarily with advanced economies in Europe, North America and northeast Asia, agreed to release 400 million barrels of oil from strategic reserves. Currently, IEA members hold more than 1.2 billion barrels of public emergency oil stocks, with a further 600 million barrels of industry stocks held under government obligation. While the strategic release is helpful, it is only a temporary fix considering nearly 20 million barrels passes through the Strait of Hormuz per day in normal times. China also could help with oil prices if it reduced its purchasing or released some of its stockpile. Ahead of the war China was buying oil at an elevated rate and in the first two months of the year, crude imports soared 15.8% compared to a year earlier. It's estimated as of January China had a stockpile of 1.2 billion barrels as well. China has also been continuing to receive oil from Iran and since the war began it's estimated they've received close to 12 million barrels from the country.    Surprise.... Gen Z is going to the mall for in-person shopping! You may be hearing that younger people don’t go to the mall any longer, but that is not true, it’s just a little bit different than when people went 20 years ago. Gen Z, the generation consisting of 14 to 29-year-olds, shops at the mall but first they check online sources like Instagram and TikTok to see what's in style. According to Nielsen IQ, the global annual retail spending by this generation is expected to be over $12 trillion by 2030. Shoppers between 18 and 24 years old made 62% of their general merchandise purchases in stores last year, but shoppers 25 and older made just 52% of their purchases in person. Some of the reasons given for the in-person preference was that Gen Z does not like to pay the shipping fees along with common sense things like they want to touch the item and see it in person especially if it’s clothing, they want to see how it looks on them. Malls understand this, and many of them have actually set up areas so that the young shoppers can take their selfies in fitting rooms and other areas that are social media friendly. If you’re a salesperson in a retail store and if you’re talking to this generation, you’d better be up to date when it comes to what’s going on in social media. Some salespeople even have a tablet to show shoppers how influencers are styling different items. It is a misconception that this generation is averse to talking to people, but how you talk to them is different. They’d rather get their advice from an influencer or a friend rather than a salesperson.   Companies Discussed: The Gap, Inc. (GAP), StubHub Holdings, Inc. (STUB), Delta Air Lines, Inc. (DAL) & Uber Technologies, Inc. (UBER)

    56 min

  5. MAR 7

    March 6th, 2026 | Market Risks You Should Be Aware of, Ivy League Endowments' Dismal Returns, AI Impacting the Labor Market, Tax Hikes & More

    Other risks in the market you should be aware of    Since Covid, speculative investments have continued to rise in popularity. We have talked a lot about the risks we see in margin, crypto, private investments, and prediction markets, but now there is new data about the increasing popularity of leveraged funds and options. According to exchange-traded fund manager Direxion, it looks like leveraged and inverse funds, which can be very dangerous investments, saw average daily trading volumes of 1.41 billion in 2025. That’s a gain of more than 130% from 2024 and 250% from 2020, the firm found. For those that aren’t aware of these products, leveraged funds use derivatives to try and boost the return of an asset in up markets, but they also amplify losses in down markets. Inverse funds on the other hand try and produce the opposite performance of the underlying asset. It’s not just these risky tools that have surged though as it is projected that average daily options volume hit 58 million in 2025, which is a roughly 26% increase from 2024 and is more than double the amount seen in 2020. For comparison purposes, stock volume expanded at a yearly pace of 10% between 2020 and 2025, while leveraged funds and options trading saw daily volumes grow at compound annual rates of 29% and 16%, respectively. Part of the reason for the huge increase in the volume for leveraged funds is that the total number of active leveraged funds grew by 50% in 2025, which was the largest annual increase since 2007. Ultimately, there continues to be more and more risk that is finding its way into this market. While it’s great when things are going up, it could create a downturn that is more problematic than many believe is possible.      Ivy League Endowments have dismal returns because of private equity    I was concerned when I saw the Ivy League schools, who I thought would be the smartest people in the room, began investing in private equity a few years ago. The results are now in, and the returns are terrible. The best annual return goes to Cornell and for the years 2022 to 2025 they only had an annualized return of 5.7%. They were closely followed by Harvard at 5.5%. The worst performer is an embarrassment as Princeton only had an annualized return of 2.8%. A large reason for the low returns is that the managers of these endowment funds invested heavily in private equity as the category made up 40% or more of the portfolios for schools such as Harvard, Yale and Princeton. The endowment funds have tried to liquidate as much as they can, but the secondary market has been rather weak, and Yale and Harvard were only able to liquidate about $1 billion of their private equity holdings last year. I think we’re in the second or third inning of how bad things will get with private equity and private debt. Unfortunately, many people, including foundations, will have poor performance and probably even some losses. A lesson to all investors, don’t get sucked into a hype investment of any type as eventually the hype disappears and you end up with nothing but dismal returns or losses.      Is AI impacting the labor market?    The headlines look concerning as February payrolls showed a loss of 92,000 jobs in the month. This was well below the estimate which was looking for a gain of 50k jobs and January's reading of 126k jobs. January's reading was revised down by 4k, while December saw a major negative revision of 65k jobs and now shows a loss of 17k jobs in the month. Health care employment, which has been such a stable force, showed employment declined by 28k in February. This was largely due to the Kaiser Permanente strike that sidelined 30k workers. The strike has now been resolved, so this should be a big benefit in the March data. Another important factor to remember was the severe weather that likely had an impact on hiring across all sectors in the month. The federal government continued to show declines as payrolls declined by 10k in the month and since reaching a peak in October 2024, federal government employment is down by 330,000, or 11.0 percent. Looking specifically at sectors that could be impacted by AI, information saw a decline of 11k, and the industry has lost an average of 5,000 jobs per month over the prior 12 months. While this looks concerning and I do believe part of this is due to AI, I think a lot of the decline is due to a normalization after rapid hiring post Covid that led to bloated employment and waste at many companies. Another sector that could be impacted by AI/Robots is transportation and warehousing. This sector declined by 11k in February, but a good chunk of the job loss occurred in couriers and messengers, which fell by 17,000. I'm still not seeing robotic delivery trucks out there, so again this could be due to normalization or the weather. With that said, employment in transportation and warehousing has declined by 157,000, or 2.4 percent, since reaching a peak in February 2025. Many of the other major sectors like   construction, manufacturing, professional and business services, and leisure and hospitality saw little change in the month.   Overall, there was definitely not much strength in the report. It is important to remember that the employment rate is still healthy at 4.4%, so I'm still not overly concerned about the labor market. With that being said, it is definitely worth watching in the coming months.      Financial Planning: Beware of the Tax Hike Above $505k    For married couples with adjusted gross incomes between $505,000 and $606,333, there’s a hidden tax increase caused by the way the state and local tax (SALT) deduction phases out. Below this range, taxpayers can deduct up to $40,400 in state and local taxes. As income rises through this band, that deduction gradually shrinks to $10,000, effectively losing $30,400 of deductions. Put another way, about $100,000 of extra income can increase taxable income by more than $130,000. Households at this level are usually in the 32% federal tax bracket, but because each extra dollar of income also reduces deductions, the real marginal tax rate jumps to roughly 42%. What makes this especially striking is that many people in this range are barely above the 24% bracket, meaning their marginal rate can spike from 24% to 42% over a relatively small income increase. Careful planning ahead can help avoid this sudden tax jump.    Companies Discussed: Planet Fitness(PLNT), Paramount Skydance Corp (PSKY), Old Dominion Freight Line Inc (ODFL), Salesforce (CRM)

    56 min

  6. FEB 28

    February 27th, 2026 | Concerning AI Deals, A Misleading 2025 Trade Deficit, Why Automobile Insurance Is So High, The Goal of Tax Planning & More

    These massive AI deals look concerning The numbers are exciting when companies like Meta or OpenAI announce they'll be purchasing billions of dollars in chips or computing power from companies like Nvidia or AMD, but there always seems to be a catch. Most recently, Meta announced that it entered a multiyear deal with AMD to deploy up to 6 gigawatts of the company’s graphics processing units for artificial intelligence data centers and includes use of AI-optimized central processing units, or CPUs. This deal comes a week after Meta committed to using millions of Nvidia's processors to power its AI expansion. While I have my concerns with all the money Meta is spending, my bigger concern with this new AMD deal is the use of stock warrants. Full details for the deal weren't announced, but we did see the deal includes a performance-based warrant for Meta to acquire 160 million AMD shares, about 10% of the company. The first tranche vests when the first 1GW of Instinct GPUs are shipped. Other tranches vest as Meta, makes purchases to 6GW. Vesting is also tied to stock price thresholds for AMD and technical and commercial milestones for Meta. AMD also struck a similar deal with OpenAI where they received warrants to acquire 160 million shares of AMD and it was tied to deployment and stock price benchmarks. The reason this is concerning is because of the potential dilution and again the circular nature of these deals. Essentially these companies are saying they will spend $30 B buying our products and we will give you $30 B in stock warrants back. Stock warrants give holders the right but not the obligation to buy or sell shares at specific strike price before an expiration date. If they are exercised, it creates new stock, which would dilute current shareholders. Based on what I have seen, the exercise price for these warrants is $0.01. Ultimately, I just don't believe this will end well for all players in this space, and I think there is a lot of money that will be lost by investors.    2025 trade deficit looks deceiving Some people are saying that the tariffs didn't work because the trade deficit in 2025 only fell to about $901.5 B from just over $903 B in 2024. However, if you break down the numbers quarter by a quarter, it tells a different story. The first three months of the year, there was a $400 billion trade deficit, but each quarter after that it began to decline. In the second quarter, it fell drastically to $180 billion. There wasn't much of a change in the third quarter with a slight drop to $175 billion and then in the fourth quarter there was a drop to $145 billion. We try to explain to people that the US economy at $31.5 trillion is like a big ship in the ocean; it cannot turn quickly. If people would be patient, I think they would see by the end of 2026 there would be further progress and I believe it's possible the trade deficit could see a decline to somewhere around $600-$700 billion based on the fourth quarter of 2025. I know there’s a snafu with the Supreme Court ruling that the International Emergency Economic Powers Act, which was used in the first quarter last year to implement many of the tariffs, was ruled illegal. But there are other ways to impose tariffs such as section 122 of the Trade Act of 1974 or section 301 of the Trade Act that the president used in his first term. Also available is section 232 of the Trade Expansion Act of 1962. I don't believe the Supreme Court ruling will lead to an end of tariffs as the Administration will look at these other avenues. One major positive from these tariffs has been the announcements of various trade deals that have resulted in trillions of dollars promised by other countries to build manufacturing and other things in our economy.   Why is automobile insurance so high? Your first thought may be the insurance companies are gouging their customers just to make big profits. First off, insurance companies are generally public companies that have shareholders who would not be investing in their company if it was losing money and not paying dividends. The high cost of premiums is not the insurance companies' fault as in recent years things have really changed. Over the past five years, physical damage costs have increased by 47%. This is because of the higher price of cars and all the extra bells and whistles that add up when there’s damage to a vehicle. Bodily injury claims are up 52% over the last five years because of the vast amount of new personal injury lawyers who have come on the scene and are pushing for higher settlements, even on small fender benders. Around 95% of these cases are settled and do not go to court. Many of your less reputable attorneys know this and hold the insurance companies’ hostage. Either settle up with us now or go to court and spend a lot more money and time. Unfortunately, if you’re a responsible driver that makes your premium payments, you are helping absorb the cost of uninsured and underinsured motorists which is up 72%. I’m not a big person for government regulation, but I do believe governments need to step in and verify that all people on the road have auto insurance and a reasonable amount. There’s a trend starting in Florida, which is tort reform that has reduced litigation, and the top five insurance companies in the state have requested rate reductions of 5.9%. There is something in the auto insurance industry called fender bender litigation and this tort reform would help states like New York, California and other states to prevent insurance companies from having to pay ridiculous settlements for little dings and dents and fake injuries. Wouldn’t it be nice if the state of California passed laws to help consumers to pay less for auto insurance?   Financial Planning: What Is the Goal of Tax Planning? Most people would assume the goal of tax planning is simply to reduce taxes, or even to reduce lifetime taxes, but that should not be the focus.  The true purpose of tax planning is to increase the level of after-tax income by intentionally managing assets and income sources. If the objective were merely to pay less in taxes, the solution would be simple: stop earning money. But earning less would also leave you with fewer resources and less freedom. What people ultimately want is more net income, more access to money, because that provides flexibility, security, and the ability to live life on their terms. Effective tax planning achieves this by building assets and income streams and structuring them in a way that allows you to access them efficiently. This means investing in the right types of assets, placing them in the right types of accounts, adjusting the strategy over time as income and tax laws change, and withdrawing funds at the right time and in the right manner. When you understand that the true purpose of tax planning is to maximize after-tax access to wealth, not merely minimize taxes, you make better decisions that improve your financial life.   Companies Discussed: Vulcan Materials Company (VMC), Leidos Holdings, Inc. (LDOS), Packaging Corporation of America (PKG) & Caesars Entertainment, Inc. (CZR)

    56 min

  7. FEB 21

    February 20th, 2026 | Google’s Century Bond, Big Expenses for Companies Investing in AI, High Meat Prices, Do Commission-Free Annuities Make Annuities More Attractive? & More

    Is investing in Google’s century bond a good idea? If you don’t want to read any further, and just want the basic answer, for investors it’s a terrible idea. On the other hand, for companies, universities or even governments, issuing a century bond is a great way to lock in low rates for a hundred years. As I said for investors, it’s a terrible idea, here is an example. In 2020, the Austrian government issued a century bond that locked in a yield of 0.85%, which was a great deal for them. But for investors who purchased that bond, it is now trading for 30 cents on the euro. Another example of how things can change is back in 1997, J.C. Penney issued a 100-year bond. Back then no one would have imagined bankruptcy would occur just a little over 20 years later for the company. You may be wondering who would benefit from buying these bonds? Generally, it would be your insurers or pension funds. They both have long-dated liabilities, so long-term bonds give them comfort, knowing what the future cash flows will be. There will also likely be some hedge funds and high-risk investors that will want to trade the bonds as they will have a high amount of fluctuation based on interest rates. In fixed income investing, there is something called duration, which essentially looks at the number of years it takes to recoup a bond's true cost. The longer the duration, the more price volatility for the bond when it comes to interest rate moves. Ultimately, for the average investor I would say to stay away because predicting which way interest rates are heading can be very difficult game and it could destroy your investment returns.   Big expenses are coming for companies that invest in AI We have talked about this in the past couple years and now after the companies spent roughly $500 billion in 2025 it's estimated they will spend another $3 trillion by the end of the decade. As the companies spend more money on data centers, chips and other items for AI, their depreciation expense will rise each year, which will reduce their income. The big tech companies are kind of sneaky currently with depreciation. Many companies like railroads and other companies report depreciation as a standalone operating expense on their income statement. The reason depreciation is important for investors to understand is that eventually equipment becomes obsolete or worn out and must be replaced. But the big tech companies currently don’t have to break out depreciation until 2028 after new rule changes take effect. Currently, they include depreciation in the cost of goods sold or sometimes in research and development or general and administrative expenses. This makes it very difficult for investors and analysts to understand the true numbers. The big tech companies defense is they currently include it in the footnotes. However, companies like Microsoft have as many as 15-20 footnotes, which are generally not seen by investors or analysts. Perhaps the big tech companies will continue to hold onto their lofty valuations for now, but at some point, the real earnings will come through, and the stocks could take a major beating. Don’t blame the restaurant or the grocery store for the high price of meat I’m sure you’ve noticed that if you want to go out and have a good steak, you’re probably going to spend somewhere in the neighborhood of $45-$50, depending on the restaurant and how big the steak is. There’s a big shortage of cattle in the United States and the numbers are staggering. In January, there were only 86.2 million cattle and calves, which is down from a peak of more than 130 million in the mid 1970s. The number of people in the United States far surpasses the number of cattle and supply/demand being what it is, it is pushing the price of cattle to higher levels. The 86.2 million heads of cattle may sound like a lot, but when you look at the numbers it is the smallest herd since 1951 and that’s when the population in the United States was 157 million. The population now stands around 344 million people, which is an increase of 119%. All things being equal, there should be around 188 million heads of cattle available. There are three main reasons why the price of meat is high and the number of cattle is low. We used to receive about 5% of our beef supply from Mexico, but a parasitic fly larvae called screwworm has destroyed that supply. Another problem is a lack of rain in Texas, which is the largest producer of our beef supply with 12.5 million cows. If ranchers don’t get enough rain, they produce smaller herds because the cost of feed increases. You may be thinking there’s a lot of cows in California as you drive up 15 and you are right because California is the fourth largest producing state for cows at 5 million, but 1.7 million of those cows are dairy cows. The third reason is simply being a rancher is hard work, and it is generally passed down from generation to generation. Most kids when they’re growing up do not dream about working on a ranch in the hot sun in the dirt all day long. Also, with the price of land some ranchers realize they’re better off selling the ranch for a big profit than continuing to work the land. Fortunately, many ranchers love what they do and despite the hard work continue to do it generation after generation. If you know any young kids that like riding horses, maybe they should consider going to work on a ranch and save all that college money?   Financial Planning: Do Commission-Free Annuities Make Annuities More Attractive? One of the primary downsides of annuities has always been the layers of fees that drag on returns, along with upfront commissions that create conflicts of interest in how they’re recommended. Commission-free annuities attempt to address these concerns by eliminating the embedded commission and often lowering internal product expenses, which in theory should improve transparency and net performance. However, these products are typically sold by fee-based advisors who charge ongoing advisory fees, meaning that while the conflict of interest may be reduced, the cost savings inside the annuity can be offset by the advisor’s separate fee. Even with improved pricing structures, the fundamental challenge remains, annuities generally offer lower expected long-term internal rates of return compared to investing directly in diversified market portfolios. While annuities provide guarantees such as downside protection and lifetime income, those guarantees come at a cost that often outweighs their benefit. In many cases, investors can generate greater long-term growth and higher income from a well-diversified portfolio. The returns may not be technically guaranteed, but it can still be done in a conservative and sustainable way.   Companies Discussed: Mattel, Inc. (MAT), DraftKings Inc. (DKNG), Ferrari N.V. (RACE) & Restaurant Brands International Inc. (QSR)

    56 min

  8. FEB 13

    February 13th, 2026 | Should you invest by following when insiders buy? It's not a stock market, it's a market of stocks, Inflation report better than expected, Larger tax refunds? & More

    Should you invest by following when insiders buy? It sounds like it’s an easy thing. Just do what the insiders do because they obviously know the company well and if the stock were to drop in value and the insiders commit to purchasing shares, it must be a smart investment. Unfortunately, it’s not that easy and there are many other factors involved. Data also shows that longer term it may not even matter. Over my 45 years of doing this, I have even seen sometimes where they borrow money from the company to actually do the purchase of the shares. With that said when they are committing their own money, does the stock do well afterwards? The Wall Street Journal did an analysis of 1,400 publicly disclosed insider purchases using S&P 500 companies. Going back to 2020, they discovered insiders at 327 companies had a total of $3.7 billion in stock trades over $100,000. Most of the purchases were completed after a decline from the previous 30 days and produced a median gain of about 2% a month later but then began to decline after that. The numbers also showed that only 15% of the purchases fully recovered from where they had fallen in the previous 30 days before the share purchase. It should also be noted that they cannot act on insider information, so if there’s something major that can move the stock either up or down, they would probably go to jail if they were to act upon it. In other words, since they can’t act upon insider information, they don’t have much of an advantage over someone doing a good amount of research about the company.   It's not a stock market, it's a market of stocks I have often made this claim when things get crazy in the stock market. What I mean by this is you don't just have to buy the stock market and instead can look for good companies within the market. The reason this is so important to understand is because individual stocks can still do well even when the broader market struggles, especially when the market gets heavily concentrated like it is today. I often reference the tech boom and bust as an example investors should study and in times like this, I believe it is even more applicable. From the tech-stock peak on March 27th, 2000, through the end of that year, the S&P 500 fell 13.4%. It is important to remember that the S&P 500 is a market-cap weighted index, which means the larger the company the more it makes up of the index. If we instead look at the equal-weighted S&P 500, where every company has essentially the same weighting, it actually gained 10.7% from March 27th through the end of 2000. Looking at specific sectors during that period, utilities, healthcare, and consumer staples were actually up about 40% to 45%, while tech fell 51.8%. It has been nice for many investors to enjoy the easy ride in the S&P 500 for the last decade plus, but I continue to believe that over the next 10 years the returns will be much more subdued in the index than investors have become accustomed to.    Inflation report comes in better than expected The Consumer Price Index, also known as CPI, showed headline January inflation was just 2.4%. This compares to an estimate of 2.5% and last month's reading of 2.7%. Core CPI, which excludes food and energy, came in line with expectations at 2.5%, but it was also lower than December's reading of 2.6% and the smallest increase since March 2021 when it climbed by just 1.6%. Food prices put a little pressure on the headline number as they were up 2.9% compared to last year. Most of this came from food away from home where prices were up 4.0%. Food at home on the other hand only saw prices climb 2.1%. Energy prices helped the headline number as prices declined 0.1% as gasoline prices fell 7.3%. Offsetting this benefit was utility prices where electricity was up 6.3% and utility gas service was up 9.8%. Many other areas saw muted price changes, and shelter continued to add pressure to both the headline and core CPI numbers. Even though the annual rate of 3.0% was lower than December's level of 3.2%, it is still above both the headline and core numbers. As a reminder, this is a huge weight at around 34-35% of headline CPI and over 40% of core CPI. If all else remains the same and shelter declines this year, I believe we could see that 2% target achieved. I was surprised to learn the Owner's Equivalent Rent (OER), which essentially measures the rate homeowners believe they could rent their house out for, carries most of the weight at over 70% of the shelter category. In January, the OER was up 3.3% while the actual rent of primary residence category was only up 2.8%.    Financial Planning: You May Be Receiving a Larger Refund New tax rules could help many filers see larger refunds this year, with some benefits happening automatically and others requiring careful reporting. The standard deduction increased for everyone, with taxpayers aged 65 or older receiving an additional $6,000 boost. The state and local tax (SALT) cap rose from $10,000 to $40,000 for those who itemize, and the child tax credit increased by $200, from $2,000 to $2,200. These automatic changes may lower tax liability without any special reporting. However, other deductions such as those for auto loan interest, overtime pay, and tip income must be properly reported to receive the full benefit. Taxpayers should review their returns carefully to ensure all available deductions and credits are captured. If a larger refund does show up, it may be a good time to update 2026 withholding elections to increase monthly take-home pay instead of waiting all year for next year’s refund.   Companies Discussed: C.H. Robinson Worldwide, Inc. (CHRW), Cushman & Wakefield Limited (CWK), QUALCOMM Incorporated (QCOM) & PayPal Holdings, Inc. (PYPL)

    56 min
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Smart Investing is the radio show where Brent and Chase try to make investing easier to understand. They demonstrate long-term investment strategies to help you find good value investments.

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