February 14th, 2026 - Will AI Crush the Software Industry?

In a lively show, hosts Steve and Adam Van Wie discuss family updates, their show's legacy, market trends, and the impact of AI on various sectors. They highlight the growing importance of diversification in investing, share insights on the labor market and economy, and even touch on the evolving electric vehicle industry with input from a caller. The engaging conversation blends financial wisdom with anecdotes, making complex topics accessible to listeners.

Transcript

Steven H Van Wie 0:00

It's Saturday morning, it's 10 o'. Clock. This is the Van Wie Financial Hour. I'm Steve Van Wie. 

Adam Van Wie 0:06

And I'm Adam Van Wie.

Steven H Van Wie 0:07

And Joey has taken Elizabeth away from the home. Apparently they got their children covered for a while and they're taking a bite out of the the Big Apple this morning. And he sent me a picture of himself standing in front of Trump Tower. So I know they're doing it up front pretty well. I think that's wonderful. Most of you who've been listening for a long time know that they had a baby not terribly long ago. So this is probably their first real foray into the real world after that and hopefully many more. So.

Adam Van Wie 0:43

So they're probably up there talking about the kids.

Steven H Van Wie 0:46

Yeah, they probably are. It's so typical, isn't it? So true. Anyway, welcome to all you regulars. We appreciate you always being there. We're in the 12th year now as of last week and actually today would be the anniversary of the first time we did a one hour show. Having the first one been cut down to about eight minutes. And after I told that story, which I do every year, as most of you probably know, Joey had not heard it before so he was just kind of sitting there in awe. Oh, that sounds horrible. And actually it would have been except that we did have a really good time getting to know Angela and they were very nice to us. So all in all it worked out just fine. And

Steven H Van Wie 1:38

no more power outages that I can remember since then. Although there was that one time that I had somebody got a call in from Wisconsin and in the neighborhood. Comcast phone company, which covers everybody around here just went out done for the whole show. We didn't have a telephone so that didn't work out. But most of the time it goes pretty smoothly around here. I think Adam would probably agree with me.

Adam Van Wie 2:06

Yeah, definitely. And it's just like the old days, just you and me today. So. Yeah, I know I've been been gone a lot recently. We've had just a ton of stuff going on,

Adam Van Wie 2:18

kids basically, college decisions.

Steven H Van Wie 2:20

And I was explaining that last week that you were the father of an about to be high school graduate. Yes, College shopping time. Yep, pretty much thoroughly in the southeast from what I've seen.

Adam Van Wie 2:37

Yeah, all southeastern schools, as you probably may know or may not know, the Florida schools at least FSU and, and UF have gotten all but impossible to get into. And that actually applies to UCF and USF as well. So we've had to expand our, our choices to look at other Options and it's been really fun. We had a great time but. And saw some cool. Some really cool campuses

Adam Van Wie 3:06

and hopefully a decision is forthcoming, but we'll see. I also was very sad to learn about Mike's passing. You called me or texted me, I think right after the. After the show we also got a n email from a listener. Just says, hey, Adam and Steve, plus Joey, longtime listener at least as far back as the days when HECT Drive was one lane between 295 exit and the zoo. Sorry to hear about Mike today. I never met the man, but I feel the loss. As one caller said, it's a family and community you guys created at 10am on Saturday. I thought that was just a really nice note from someone who I don't know, I've never met, but part of the family. Yeah, it's always great to hear about listeners and people that tune into us every week. We really appreciate it and thanks for listening.

Steven H Van Wie 3:54

And I explained last week how in the big world of radio, it's hard to say how many people are listening. But you know one thing, no more than 5% of them will ever call a radio show. And therefore you know that when you get a call, and sometimes it's from a total stranger, sometimes it's somebody you know pretty well, but when you get a call, you know, there's a lot more people out there listening to it than you might think there are.

Adam Van Wie 4:20

Yeah. And it's very. It's just nice to know that when what we do every Saturday morning and give our time up on those weekends and it's just nice to know that people actually care and are listening.

Steven H Van Wie 4:30

Yeah, well, the. The other thing is a lot of radio people names, you know, make a lot of money doing this. You're not listening to two of those now. No, kind of the other way around. We're what I've always called Tier 3. Tier 1 was Rush and Sean. People like that, they get paid, flat out, they get paid to do it. And then there's Tier 2, which was Neil Bor, where they didn't pay him, but whatever advertising he could sell on the show, he got and he was very successful doing that. And then there's the rest of us. We write a check and we do the show. Yeah, just like that. And that's fine. That is not a complaint in any way, shape or form. They've treated us very well around here and we appreciate it. Anyway, if you're new to the show, we sometimes actually talk about financial things. We took a Little break from that last few minutes, but that will change very suddenly. So try to stick around. We always tell people that a couple of things. One, you will learn something if you stick around for the whole hour, that's a virtual guarantee. And the other thing is that there are no dumb questions. If there's something you don't know, there are a lot of other people who don't know it as well. And if we can spread out the word to the people listening, that's wonderful. Plus, the easier the question, the better we look. And that is your main job, to make us look good. That said, everybody who was tuned in on time heard something about having a couple of thumbs down. And that's the way it went this week.

Adam Van Wie 4:42

Yeah, exactly.

Adam Van Wie 5:06

But.

Adam Van Wie 5:13

Definitely.

Adam Van Wie 6:05

Yeah, you know, it was a, it was outside of the market. It was, it was actually a pretty good week because a lot of good news out there. And we will talk about that, but we do have to start with the market and, and even this, this bad news isn't really bad news. It's really interesting what's happening right now. The narrative around AI, it's definitely shifted. It started off over the last three years as this AI will probably help all companies by reducing headcount and automating small tasks. And now just in the last, I don't know, six months or less, it's gone to hm. I wonder if this AI thing can completely destroy a business model of certain companies. And I think there's something to that, and so does the market. This type of uncertainty always surrounds big advances in tech. It's just like when the Netscape browser was introduced. And over the next 10 years, the Internet was at the center of everything, or it became at the center. It worked its way into the center of everything. I was in grad school at the time and I was out on the west coast for spring break in California doing some interviews. I had dinner with my aunt and uncle who had a very, very successful career in advertising in Chicago in the pre Internet era. Think about Mad Men, that type of thing. I remember my uncle looking at me with great disdain like he usually did, and saying something to the effect of, you really think this Internet is going to be that important to the business, to business, and, and in the future? And I replied, I do. And he just scoffed at the idea. He couldn't under. He, he didn't, couldn't see it, didn't understand it. He had been very successful without it. And I feel like we're kind of at that point with AI where the older generation is probably scoffing at it. But the younger generation is looking at it and saying, wow, this is going to change everything.

Steven H Van Wie 8:02

He was probably picking up on Bill Gates at the time who, yeah, was notoriously

Steven H Van Wie 8:10

not down on it so much. He was very skeptical. I'm not just too sure about this Internet thing.

Adam Van Wie 8:16

Thing. Nope, nope. I don't think too many people are skeptical, skeptical that AI will be important. But I think that the debate right now is will it, will it be helpful? Will it be, will it hurt companies? Will, will it destroy certain parts of industry? And that's really playing out in the stock market right now. You're seeing big names that, that investors think are going to get hurt by AI drop just by huge amounts just get destroyed and other areas are doing very well for that exact opposite reason.

Steven H Van Wie 8:48

Yep. The one thing that's absolutely certain with this is change to what from what we don't know. All right, got to take a quick break. We'll be right back. Don't go anywhere. This is the Van Wie Financial Hour. Welcome back to the Van Wie Financial Hour. 

Steven H Van Wie 9:00

Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie. 

Adam Van Wie 9:02

And I'm Adam Van Wie.

Steven H Van Wie 9:18

And we do have as usual, a trivia question sponsored as usual by Paul Lloyd at First Coast Alarm. You can call Paul at 904-636-7888. Now we're getting to the tax time and I start at this time of year thinking a lot about things like IRAs. Came across a statistic that kind of breaks my heart. So you already got a hint which way this is going to go. There is, there are, there is. Percentage wise, about 36% of plan participants and IRA holders are eligible due to their age to make catch up contributions. That means 50 or older of all of that. That's a large pool. What percentage of those actually make catch up contributions? It's just a whole number between 1 and 100. So if you want to give us a call, the lines are open. 904-222-8255

Steven H Van Wie 10:07

and we'll put you on right away, whether it's for a comment, a question or to take a chance at the trivia. All right, back to the market rep. There's a lot more to say. You know, I spent a lot of time talking would otherwise have been in market rep. So let's have Adam carry on.

Adam Van Wie 10:25

All right. I think the most interesting thing about the market right now is that the money, money is not flowing out of the market really at all. It's just changing sectors. It's flowing out of those sectors that are deemed vulnerable to AI like tech, financials and communication services. But it's flowing into sectors that are not vulnerable, like energy, materials, consumer staples and industrials. You can't use AI to drill for oil or mine for copper or manufacture, manufacture widgets. It can certainly help with those things, but it can't replace the actual industry. And that is what the trade has. The trend in the trading has been.

Steven H Van Wie 11:04

Right now, I'd call this the massive rotation.

Adam Van Wie 11:07

Yeah, definitely. And it is pretty massive. I'll get to that in a second. But for the week, the Dow was off just 1.2%, the S&P 1.4% and the Nasdaq was off a little bit more at 2.1%. The Dow is the only major index that is positive for the year, up 3%. However, some of the indexes that we don't talk about as much are positive for the year, like small and mid capsule. The S and P equal weight index and almost any value or dividend index that I looked at was also up. The energy sector is up over 20%, materials are up over 16% and industrials, consumer staples and semiconductors are all up over 11%. So some pretty big winners this year despite the market being slightly down. The worst performing sector is financials and it's down just 5.6%. So it's. Even if you're in all the bad sectors, you're not down that bad.

Steven H Van Wie 12:02

That's the one that I still find kind of mysterious.

Adam Van Wie 12:05

The, the, the financials.

Steven H Van Wie 12:08

Yeah, I would think I would benefit financial companies.

Adam Van Wie 12:11

You know, it probably will in the long run, but I think people are, I think the short term has more uncertainty for financials. But when you think about things that they could do or that financial companies do, it's very diverse. But obviously they're doing a lot of the loans for these, for these data centers and all the capex that's going into AI build out and so that's beneficial to them. And I think that there's going to be M and A surrounding that that will benefit financials. But there is some, some downside risk as well.

Steven H Van Wie 12:46

So it's just, I, I can't quite put my finger on it yet. I, I just, I should say, I guess that I just kind of disagree with them. Everything else I understand about what's hot and what's not.

Adam Van Wie 12:57

Yeah, the worst performing asset class this year has been Bitcoin. It's down over 25%.

Steven H Van Wie 13:03

I understand that.

Adam Van Wie 13:04

Yep, definitely. International stocks have kind of done the opposite. They've continued to perform well Brazil's leading the way higher with a gain of over 21%. Mexico and Japan both have gains of over 15% while Israel and Australia are both up over 11%. Emerging markets as a whole are also up over 11%. The all world except US index is up almost 9%. So it's been better than the US again. That's the second year in a row. Obviously the year's not over, but so far this year, gold continues to rally, it's up 14 and oil up 10.4. Bonds are also creeping up, gaining about 1.1% this year, which is nice to see also.

Steven H Van Wie 13:46

Yeah, to me that just points to one thing, which is something we've always preached and that's very simply diversification.

Adam Van Wie 13:53

Definitely. Well, the market is trading sideways. Economic data is trending up. Let's talk a little bit about the January jobs report. It came out this week and it was stronger than expected at 130,000 new jobs created versus 55,000 predicted. The unemployment rate dropped to 4.28% and the participation rate hit the highest level since January of 2000. Manufacturing payrolls also rose as the national data is finally catching up with the regional Fed data which has been showing that sector increasing for several months now. It's all good news, but the best news is that average hourly earnings are up to 5% annualized, well above the 2.4% inflation reported by the CPI report on Friday.

Steven H Van Wie 14:39

And did you see the truflation number this morning? 0.67%.

Adam Van Wie 14:41

I didn't look this morning.

Adam Van Wie 14:45

Wow, that is really low.

Steven H Van Wie 14:46

That is really, really low. In fact, that's my danger zone. I don't really want it under one.

Adam Van Wie 14:51

No, it's fine. Temporarily. You don't want it to stay there for an extended period, but I would say for a few months even. It's totally fine.

Steven H Van Wie 14:59

Yeah. Another interesting comment on that jobs report. If you forget about for the moment the decrease in federal employees, the actual number, in other words, the private sector number was 172,000.

Adam Van Wie 15:17

Yeah.

Steven H Van Wie 15:17

Which is way, way, way above,

Steven H Van Wie 15:22

well, what the media wanted or what investors wanted if for some reason that number was treated with disdain. And I think it's all about the Fed.

Steven H Van Wie 15:33

Things are too good. The Fed's not going to cut rates. Is that more important to me than anything else? Absolutely not.

Craig 15:40

No.

Steven H Van Wie 15:42

Yeah.

Adam Van Wie 15:42

I don't know. I don't know. I could make a case either like to stay at this level of interest rates person and my personal preference to stay, but I know that there are lots of borrowers out there. Who disagree with that. At this point in my life, I probably more of a lender than a borrower. So I like higher rates, but I get the argument for lower rates as well.

Steven H Van Wie 16:05

Where you stand depends on where you sit. For so many things in life, if.

Adam Van Wie 16:07

Exactly. So true. This were 20 years ago, I would be for lower rates.

Steven H Van Wie 16:13

Absolutely. And I have no problem disagreeing with people because it's circumstantial. I'm different than they are. Of course, I see it differently, but I think

Steven H Van Wie 16:27

the nature of the changes in the economy, actually, let's say the real changes to me, are being done despite the biggest headwind ever. That's called the media. What they're trying to do to Trump is just driving me absolutely nuts. They can't admit that there's any good news out there or that he's doing anything right. And I have a classic example.

Steven H Van Wie 16:56

You all probably know who the CBO is. Congressional Budget Office. That is the supposed independent arm of Congress, where they feed it numbers and the CBO is supposed to tell them what it's going to cost. Well, for decades, the CBO is a. Not independent. They're very liberal. And two, their methods are as old as the Bureau of Labor Statistics, which are the people who gather the jobs data. And we know that the administration has been working on that. They have a new head of the thing, and they're starting to toss out their old methods and get some better ones in. That's all well and good, but this one bothered me terrible. The CBO lifts the US deficit call by 1.4 trillion on Trump policies. So what they're doing is they're putting in their crazy old static numbers, as they always do. And they came to the conclusion that for the next nine years, the annual growth rate of the economy will be 1.8%.

Adam Van Wie 18:04

Based on.

Steven H Van Wie 18:06

Based on the CBO hating Trump. There is no other reason for stupidity of this nature. That's it. We know the economy has grown in the last two quarters substantially. It's just getting started. We're going into a wild period of construction, for instance, bringing jobs back and creating jobs in our factories that are being built and polished and cleaned up and all of that. And they come out with a stupidity where they now say that it's going to increase the deficit by 4.7 trillion over the next 10 years because of lack of growth and tax cuts.

Adam Van Wie 18:49

That's just not. I mean, just the productivity gains from AI will offset that. That's. That's just ridiculous.

Steven H Van Wie 18:58

They get away with this because nobody will call them on it. Except for sometimes Fox and sometimes people like us. But Powell is behind it. Powell is feeding them all this junk. That Fed Chairman Powell, in case you weren't paying attention here, Powell's attitude about Trump is probably partly deserved. You know, he, I, I think he's done a pretty good job. We've talked about him since he's been in. In our lifetimes, he's been the premier, imperfect, but the premier Fed chairman that we've ever witnessed. But Trump's on his case something fierce and very publicly and he's lashing back. And I believe that he's lashing back in a way that's going to harm people rather than help them. Yeah, we'll see what happens.

Adam Van Wie 19:28

Yeah.

Adam Van Wie 19:49

I don't know. I think that he will leave this job as the only Fed chair in recent, well, maybe the only Fed chair that didn't have a major misstep during his tenure. He did have that political back and forth with Trump. I don't think he started it, honestly. No, I don't think he started it. Yeah. And I honestly think that he will leave as, as at least his legacy will be. Not about the Trump stuff. I think it will be. He navigated us through covet and didn't really have a deep, prolonged recession, maybe a minor recession in, in, was that 21 or 22. But honestly did a pretty good job.

Steven H Van Wie 20:07

I'm trying to be fair.

Steven H Van Wie 20:31

Yeah. And there was no textbook chapter on what do you do in a pandemic. So I, I'm, I'm kind of with you. I, I try very hard to be fair, but he still irritates me when he does stupid stuff. Anyway, we'll be right back. Don't go anywhere. This is the Van Wie Financial Hour. 

Steven H Van Wie 20:34

Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie. 

Adam Van Wie 20:36

And I'm Adam Van Wie.

Steven H Van Wie 20:57

I remind everybody, lines are open. 904-222-8255 and you can take a shot at our trivia. Of all the American investors who are eligible to make catch up contributions in their IRAs and 401s, we. What percentage of them actually do that? Now a couple points that I wanted to wrap up. And then Adam's going to delve us into the question that I was expressing confusion about. I guess the complete so far reduction in federal employees is over 332,000.

Adam Van Wie 21:31

It's at the lowest level in 20 years.

Steven H Van Wie 21:33

Right. 1966.

Adam Van Wie 21:35

Oh, wow.

Steven H Van Wie 21:36

Yeah. Now

Steven H Van Wie 21:39

that's, you know, it sounds like maybe it's bad because. Oh, all Those people not getting their jobs. From a taxpayer standpoint, this is really big stuff because that's a bunch of people we're not paying for. And it's well known that the productivity level in the federal government is nowhere near like it is.

Adam Van Wie 21:58

It's not private sector. It's not even close.

Steven H Van Wie 22:00

Nope. So this is all really, really good news. One more thing. The earnings season, we're so far just under a thousand companies reporting. These are astounding numbers. Also, the earnings per share beat rate, 72%, which is on the high side. It's not blowing it out of the park side, but it's really good. And the revenue beats 84%

Steven H Van Wie 22:25

at. I've never seen.

Adam Van Wie 22:27

No, that's really high.

Steven H Van Wie 22:29

Really high. And even the guidance, 11% up and 7% down. That's a 4% spread. That's also an excellent number. So economically, say what you want, think what you want, but things are pretty darn good out there. I'm so glad there's room between now and the election.

Adam Van Wie 22:50

I mean, I'm not in the business of predicting, but if I had to guess, I would say the market either go, we have a good year or we see a little bit of a washout, a correction and then a good year. Yeah, Those are the two scenarios that I think are the most likely.

Steven H Van Wie 23:05

Yeah. I just don't think there's enough push to have the market go down.

Adam Van Wie 23:10

I think there's plenty of reason to because it's high right now. That's the main one. I could make a case for a big sell off and then. But a big rebound.

Steven H Van Wie 23:21

Yeah. Well, it is oversold. There's. We're almost completely.

Adam Van Wie 23:25

It's been overbought and oversold.

Steven H Van Wie 23:27

I mean, over. Excuse me. It's overbought.

Adam Van Wie 23:30

Yeah, but it's been oversold like twice in the last two weeks.

Steven H Van Wie 23:33

Four weeks. Yeah, it's double redoubled, backed up, whatever. It's crazy.

Adam Van Wie 23:38

Yeah, there's a lot of, a lot of interest on both sides right now.

Steven H Van Wie 23:43

Because I recall in our early January show we said we think this is going to be a pretty good year, but expect a lot of volatility. Somebody's trying to prove us right.

Adam Van Wie 23:50

For sure.

Adam Van Wie 23:52

Apparently My feeling on that has not changed.

Steven H Van Wie 23:55

No, me neither. Anyway, Adam, Adam said he wanted to talk about my, my particular questioning of. I don't quite understand why the financials are taking a bath right now. So he's going to teach me something.

Adam Van Wie 24:09

First, you have to remember there's a lot of different financials, companies, a lot of different types. You've got banks, you've got custodians like Schwab and Vanguard. You've got, you've got investment banks which are not banks at all, but do something entirely different. So there's just a lot of different types of companies within the financial services group. This one, the best example this week that I found was a small custodian that we actually use. It's our secondary custodian, Schwab being our primary. We use another one called Altruist, mainly for smaller clients. They're pretty new. They're a startup. They're backed by some big names including Vanguard and, and others. But they are, they are really cool. They're made for RIAs like us. And they have some really unique features that, that really cater to our business model. They're not for everyone. You know, most, most of our client money is still at Schwab. They have the name, they have the reputation. They've been around forever. But for the right client, it makes a lot of sense to use them. Well, they came out with an AI, AI powered tax planning tool this week. And the fact that they made that announcement, it dropped the market share of Schwab, Vanguard Fidelity. Billions of dollars were lost in market cap just on the announcement that this little startup that's not even publicly traded and very. And their assets are a fraction of what those big guys are, had developed this AI tool before any of the big guys did. And it just wiped out tens of billions of dollars off of. Off of the market cap in financial companies. Schwab, Raymond James and LPL all slipped between 5 and 10% on the news on Tuesday. Just crazy.

Steven H Van Wie 26:04

Okay, I'm as confused as before, but at least I know something happened to elicit a reaction. It's.

Adam Van Wie 26:14

It's just pretty interesting. Of course the small startup company is going to come out with these things before the big guys. The big guys take years to develop this stuff and then once it's developed to deploy, it is so much harder. Whereas this little company is very nimble and can and can adapt and, and announce these things and develop these things and react quickly. So. But that's the type of thing that's moving the market right now. This is just one of probably hundreds of stories of these small announcements getting picked up by the market and then just wiping billions of market share out of other parts of that sector in, in, in less than a day.

Steven H Van Wie 26:52

When the big guys move, they move. It's done with computers. And they are emotionless computers. You give it a parameter and it will do it. And little guys like us and everybody listening here, we have absolutely no say so about any of this. The only thing we can do is try to design really good portfolios that have a lot of contingencies, diversification, as I said earlier, and then try to keep people from doing stupid things like chasing all that.

Adam Van Wie 26:54

Yeah, definitely.

Adam Van Wie 27:25

Yeah. And I think. And it works because we are.

Adam Van Wie 27:31

Our average client is still up for the year despite the S and P and the NASDAQ being down. I think. Yeah, it really does work. You just have to trust the process and the system and it's been proven out over years and years, but it really works.

Steven H Van Wie 27:47

Okay, I'm going to ask you a question that I asked Joey. I think it was last week. The CFP Board, Certified Financial Planner Board. And I should back up a little bit because we don't talk about this very often. Both Adam and I as well as Joey are certified Financial Planner planners or CFPs. And that that is an organization, the CFP board that makes the rules and designations and so on. For people with the cfp, it is the ultimate in initials you can have after your name if you're in the financial planning. There are, there's at least one other that's also very good. But if you really want to get into the, the financial planning program at the highest level, we are it. We're also very highly educated. There are only four people in our firm and there are two, four or six, at least seven college degrees and three CFPs. People find that a little surprising sometimes and we've had people comment on that lately. But one of the, one of the precepts of even being able to sit for the CFP exam is that you have to have a four year college degree. Now it wasn't always like that. I can't remember how many years ago they put that in.

Adam Van Wie 29:07

Many, quite a few.

Steven H Van Wie 29:09

And there is now a serious discussion throughout the industry as to whether that should be repealed. Do you have a take on it?

Adam Van Wie 29:19

I think you. I don't think it should be repealed. I think they should keep it. I think if like so many things these days, the college degree, it's not that you learned so much and suddenly going there is what made you eligible to get it, but it's just a sign that you did the work you were dedicated to finishing that it's. You can get a college degree from so many places in so many different ways. There are countless companies that will pay you to get a college degree and pay for the degree. And I just feel like, it's a. It's like the bare minimum to work in a financial services type setting today.

Steven H Van Wie 29:59

I'm in total agreement. And one of the arguments is, well, you don't have to have a degree in financial planning to sit for the test. No, you can have a degree in psychology. Okay, well, psychology is a huge part of our business.

Adam Van Wie 30:13

It's almost more than the math and finance side.

Steven H Van Wie 30:17

It's really far less about doing things like picking stocks and all that. What people traditionally think of as a financial advisor. This is totally different. What if you get a degree in mathematics? Well, math is critical to what we do. There. You can't really come up with an area that we can't relate to being a cfp, because when you deal with people in the entirety of their lives, then you figure out that it's really important to be good at all this stuff. And so I'm with you. To me, proving that you can finish what you start is critical. So let's see. Maybe we can find some numbers that would help us cement our opinions. Oh, here's some. What's the value of hiring a cfp? Well, there is an ongoing study from the Certified Financial Planner Board, and it says it is the first comprehensive academic study to track and report actual impact of holistic financial planning on clients. So that's

Adam Van Wie 30:36

Absolutely.

Steven H Van Wie 31:36

monotone and the numerical values now have been put together, and I'm going to have to skip quietly to the. After the next break. But essentially, many of you are probably familiar with a fairly new company in the horizon called Smart Asset. You see them kind of all over the place in our literature and so on.

Adam Van Wie 32:00

Yeah, I don't think the average listener knows what that is, though.

Steven H Van Wie 32:03

Maybe now some guy who dropped out or maybe finished out of Harvard or something like that, and he wanted to start this company primarily. He wants to educate the public and fit them with good financial planners. And he's been developing a website, and now he has a system that's just put out and it's kind of interesting. And I'm going to explain right after the break exactly how it's turning out. You'll want to hear this. It's good. All right. Don't go anywhere. This is the Van Wie Financial Hour. 

Steven H Van Wie 32:34

Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie. 

Adam Van Wie 32:36

And I'm Adam Van Wie.

Steven H Van Wie 32:37

And we have on the line an old friend of the show that many of you probably are familiar with. And we're gonna put him on now.

Craig 32:48

Hey, guys. How's it going?

Steven H Van Wie 32:50

Real fine. This Is Craig from Cincinnati, everybody. What's happening?

Craig 32:54

Hey, Steve, I'm gonna guess at only 5% on your quiz question, so you can file that away.

Steven H Van Wie 32:59

Okay? Well, I don't have to go any further because that number is 5%.

Craig 33:04

Oh, no shit.

Steven H Van Wie 33:08

That's funny.

Craig 33:10

Yeah, Adam and I go. Adam and I go back and forth a lot. And you know, he knows I'm a big Rivian. Rivian guy, the electric car maker. And I know I'm probably swimming around in chummed enemy waters here talking about EVs on a conservative radio, but I've.

Steven H Van Wie 33:26

Been reading stories all week about how they're booming.

Craig 33:30

I got it. I got to give a plug to Rivian and I got to let folks know my background. My background, of course. I grew up in an old school filling station, right? My grandpa came home from World War II and started a Standard Oil with a guy named J.D. rockefeller, 1951. And my dad inherited it. My brother bought it a few years ago off my dad. So I grew up pumping gas and petrol and repairing tires and doing oil changes. So, I mean, as they used to be called, I was a grease monkey growing, growing up. And Rivian is of course manufactured all in America, which I think is pretty cool, which I don't know if a lot of people know. And it's just down the interstate from Peoria, Illinois, where I grew up in Bloomington, Illinois, Normal, Illinois, and an old Mitsubishi plant. And I've been, I'm long on Rivian. I've been buying their stocks since 2023, but they finally hit A. They actually achieved GP in their earnings call on Thursday, which I did join the earnings call, you know, and I think as they launch this R2, it's a really interesting investment for people who are, who are long, you know, I don't, I don't jump in and out. I follow all the advice from you guys. I love listening to your show. And they, since they hit GP in their launch in this second model, their first model, the R1's been out since 2022, but it's about $100,000 SUV, which is not realistic to most of us, most Americans. And the R2, much like Tesla's model, right? They had the model Y which was very expensive. Then they came out with the three, which I think you can get a model three brand new for like 38, 39 grand. Now that's better. R2 for Rivian, which will be a mid sized SUV, kind of like a Ford Explorer, a little smaller, but bigger than a RAV4 is going to be 45,000. So that's.

Craig 35:15

Yeah, they were a highlight yesterday in the market. Right. They, they jumped 26.6%

Craig 35:22

because of those results. And I saw that Morgan Stanley has tripled their investment. Yeah, in, in them and you know I, there's, there's be a lot of pushback on EVs. But when you look at the technology change, I listen Adam talking about his aunt local who killed it in the old school paper advertising and thought the Internet was probably going to be a bust in a bubble which there was a little one of those in 99, but a little bit, A little bit as you and I know from our at home.

Adam Van Wie 35:51

Yes, exactly.

Craig 35:54

But, but I, I think evs are here for, for the long haul and just like horse and buggy got replaced before there were, there was a filling station or you know, a petro station on every corner. People just kick and scream about EVs or you know, I know solar has its problems and intermittency but you know, we're not getting, there's not few people, fewer people on the planet and there's not any less consumption of energy. So I figure the more places we can find it and use it, the better.

Steven H Van Wie 36:24

Yeah, they're being relegated now to optional status. The thing that irritates me.

Adam Van Wie 36:32

No, I think what he's saying is like under the previous administration it was almost mandated that we move to EVs and now it's, it's whoever wants one feel free to buy one. And, and I think there's going to be a percentage of people, maybe even an increasing percentage of people over time that will, that will opt in to buying an electric car over a gas engine. And so the, the let the market decide I think is what you're saying.

Steven H Van Wie 36:59

Yeah, exactly. And I told Adam I'm seeing them around town now quite frequently. In fact Sarah was with me the other day and she kind of pointed one out and we both agreed that's a really, really nice looking.

Adam Van Wie 37:11

They are, they're really nice.

Craig 37:12

So that I think that's the key there guys like. And I think we're all, we're all a big group of capitalist pigs. And I know that, I know that in September the $7,500 rebate or the federal rebate was withdrawn or ended. And I think that's actually helpful for Rivian because you've had two of the biggest write offs in automotive history. Ford wrote down their lightning like at a tune of 11.1 billion. I think Stellantis an 18 or 26 this week they announced and, and you go, okay, who's going to be left standing between Beta and vhs? Which EV maker? And it's going to be the one I think puts out the best product because Americans are very discerning consumers. And if I can get an R2 for say roughly 50 grand out the door, brand new and I can program, hey, drive me to Columbus to this hospital where I do a lot of work. That's my day job. And I can safely read the paper. I've got the Wall Street Journal, I've gone through like three this morning. I've been up early reading and I can do that while the car drives me point to point, or I can have it pick up my children at school. I think those are game changing technologies for Americans.

Steven H Van Wie 38:18

Another one, Another one I like too. I've been thinking about this ever since it got going. Take yourself to the dealer and get an oil change or whatever you need and then come back and it would do it. I love that.

Craig 38:32

Yeah, well, that's the thing you don't need to do that with, right the, the EVs.

Steven H Van Wie 38:37

No, there's going to be maintenance, but it won't be an oil.

Craig 38:40

Yeah, there's very little. There's. And it's. So there's, there's pluses and minus to everything. Obviously. I think most people's concern right now is, surrounds range anxiety with their battery life. Especially if you're like me, you're in a northern climate,

Craig 38:55

it does affect range. But these are, those are all problems that people had to deal with as they switch from horse and buggies and feeding horses or finding a petrol station. And I think the market's continuing to solve for those by installations of new fast rapid chargers. Tesla and Elon have made their charging system pretty agnostic so you can charge Rivians and other types of EVs with it. And you know, I think there'll be people like Adam that sit at the dinner table as a, as a budding young, bright college student that look at his aunt and uncle go, okay, I hear you, but I disagree with you. So I think Gen Z is that generation now, right? That's like, hey, I want something easier, cleaner, smoother, I can plug it in and be done with it. Not have to do an oil change every five or 10,000.

Adam Van Wie 39:36

Yeah, well, we got to get them getting driver's license first.

Steven H Van Wie 39:39

Yeah, no kidding. That's a trend I'll never figure out.

Craig 39:43

Well, you know, that very well may be something. I remember reading that in the Wall Street Journal. Fifteen years ago we were at 84% of 16 year old, the lowest in history. But as more and more autonomy develops with this software, you know that in the Chinese are absolutely kicking our. You know what when it comes to EVs. Warren and Charlie started buying BYD stock in 2012, announced that it's a meeting. So I look at what Rivian's doing with a design package and what they offer the consumer and I think people continue to choose it just because for their day to day driver it makes sense.

Steven H Van Wie 40:19

Is there anything to the solid state battery news that I've been hearing?

Craig 40:25

Yeah, well, Rivian right now, the longest they have and this is obviously always assuming STP like standard temperature and pressure and everything's flat is like a 400, 410 mile range and that's all, all solid state. But Toyota's got something in the works that looks really cool. That is like 7 to 800 mile range and that's a different battery technology. And I don't fully understand it. Certainly not enough to talking on a big radio show about it.

Steven H Van Wie 40:52

Yeah, they're, they're talking about a very short charging time and a very long driving range.

Adam Van Wie 40:57

See, those are the kind of things that in my mind will sway people to move over from gas engines.

Steven H Van Wie 41:03

Absolutely.

Craig 41:03

Yeah. Well, the only thing is like we all, if you're grew up in the Midwest like a lot of us did, and you're used to a road trip, like we took the kids to Green Bay to go to Lambeau Field this year to hopefully watch the Bengals play. And that's a, that's a. If you're planning and charging, you obviously have to plan that out. And charging takes about a half an hour to go from 10% to 80% at a rapid charging. And so you kind of plan that out. That's a little, a little more onerous in an ev. But for most people, the day to day driving around Jacksonville or Cincinnati, wherever it is, you don't even think about it because you run all your errands, you do your thing and then you come back home at night, you plug it in and you're done. And you never, you never worry about that except for a road trip. Or towing. Towing a. You know. Yeah, obviously if you're out there fishing and going out on the Gulf or you're, you're on the Atlantic side, whatever, towing, just like cold weather affects your range.

Steven H Van Wie 41:49

Right.

Steven H Van Wie 41:59

Yeah, yeah. I've always thought of the EVs of being a second car and yeah, maybe.

Adam Van Wie 42:05

It'Ll change for a lot of people they are right now. But they could, that could change too.

Craig 42:10

With the 45 grand price point, that might change. And you know, that particular category, you know, Tesla is the number one selling vehicle in the world, but the Model 3 and then the next are midsize SUVs like RAV Fours or Honda CRVs.

Craig 42:27

What's that?

Steven H Van Wie 42:28

I. My personal opinion is I think Teslas are boring to look at and Rivian is not boring to look at. That's just my opinion.

Adam Van Wie 42:40

You're not talking about the cybertruck, obviously. Obviously.

Steven H Van Wie 42:44

No. I'm certainly not starting to see those around too. So they're catching on a little. But I, I think their cars are very plain and the Rivians are, as I said, they're eye catching to me. So I, I'd stick with it, I think if I were already in it. I hope they succeed. I had no idea. Somehow they're 100% American.

Adam Van Wie 43:07

Somehow the stock is still down this year despite that 29% bump or 27 or whatever. It was crazy.

Craig 43:13

Yeah, Yeah. I started like I said, I started buying at 23 and then 24 and you know, I'm long on them. I'm going to hold them. I'm a buy and hold guy. So I tried to find some value because they, they clearly have just crashed since their IPO. But with the 5 billion, 5.8 billion from Volkswagen to develop their software and everything hinges on the R2 launch. Right. March 2012. They're going to come out with all the trim levels. There's 150,000 people that already pre ordered the R2.

Steven H Van Wie 43:45

Wow, cool.

Craig 43:46

So we'll see what demand does. I'm actually, I got a work meeting in Detroit in a week and a half and I'll be. I'm going to try to test drive because there's a Rivian dealership. Ohio and Iowa have some anachronistic laws where the car dealership association has lobby the state capital and you cannot open a Rivian dealership in Ohio. It's against the law.

Adam Van Wie 44:07

Go figure.

Steven H Van Wie 44:08

Hey, we're up on the end of the show. Thanks for calling. It's always fun to talk to you.

Craig 44:14

It's all right. Stay warm.

Steven H Van Wie 44:16

Yep. Okay. Well, we'll see you next week. That was fun. Hopefully more fun. We'll talk about CFPs next week, so be there.