Jason Moser (2:29)

You know, I have not done that. I typically, you know, I typically don't do that. I try not to overreact. For me, I mean, I am going to be making some sales here, I'm going to, making some sales here in the coming months, I guess as I shore up just some, some final college tuition funds. But, but on, on the whole, no, I've been focused a lot more on my winners and trying to spot opportunities to add to them while just kind of, you know that old saying, right? You water the flowers and you pull the weeds out. I'll pull those weeds eventually, but thankfully I don't have a ton of them.

Dylan Lewis (3:06)

It's always a good thing, right?

Jason Moser (3:07)

Yeah, yeah, yeah.

Dylan Lewis (3:09)

Only changes for me was upping what I can contribute to my 401k on a paycheck basis. Just making sure that I'm hitting that new match thanks to the IRS bumping things up $500 but otherwise keeping things steady as they were.

Jason Moser (3:22)

Oh, wait till you get to be my age, Dylan. Then, then you get to take advantage of those catch ups. Right?

Dylan Lewis (3:26)

Can't, can't complain about a catch up.

Jason Moser (3:28)

Right. Get there eventually.

Dylan Lewis (3:29)

That's, that's 31,000 a year if you're over 50. For the folks listening and a little PSA, you still have time to make that change for that first paycheck of the year if you're interested in doing that. Let, let's hit that credit card consumer debt story that you mentioned. This was, this is a story we've been following for a long time and we in particular have been talking about quite a bit on the show. American budgets being tight, inflation, higher interest rates really straining the consumer and how much money is available for discretionary spending. It has felt like for such a long time. We are in bend, don't break territory. Are you confident that holds for 2025?

Jason Moser (4:08)

Well, I'm not. I partly am and partly not. And what I mean by that is this, what we're seeing is kind of a tale of two economies here. And it's one where higher earners are doing okay, but it's the lower earners that are finding themselves in a real bind. And we were, we were talking about the story that we saw in the Financial Times earlier in regard to just lenders writing off credit card debt. Right. They've written off $46 billion in seriously delinquent balances for the first nine months of this year. That's up 50% from a year ago. In when they say seriously delinquent balances, that generally refers to debt that's, that's 90 days or more past due. But, but what we're seeing for the most part is that, that higher earners are still doing okay. The personal savings rate of 4 and a half percent that is flat from the same time a year ago. But it's worth keeping in mind that is, is weighted more towards higher earners. The lower third of, of consumers here in the U.S. according to this report, essentially have no savings at all. And I think that's where we start to get a little bit more concerned because you, you said it there, the key phrase, their discretionary spending. And that's something that will be impacted by this most likely if these numbers are, are accurate.

Dylan Lewis (5:27)

One thing that kind of strikes me processing all the data from the holiday season that's coming in is it doesn't seem like this has yet affected what people were doing at the stores this December and late November. I think we saw the National Retail Federation say that holiday spend was estimated to be just shy of 1 trillion, a new record for the year. Saw data point that a third of consumers have taken on debt during the holidays. So a lot of the data we're looking at for this story is kind of November and backwards. It's not really incorporating the heaviest part of the December spend which, which I mentioned, Jason, to say, like I'm concerned that we are going to be seeing this problem get a little bit bigger and, and a little bit bigger as the months go.

Jason Moser (6:07)

I think that's a reasonable assumption. I always say never underestimate the American consumer's ability to behave irrationally. Right. If we're all tapped out, we'll find ways to get it done. And there are more tools in our system now for folks to spend money right now. It's not just credit cards. I mean that whole buy now, pay later market that has grown considerably since first being introduced just several years ago. But yeah, I think it's going to be really worth paying attention to when we see these banks announce report earnings here in January. We'll see the big banks, JP Morgan, bank of America, companies that really do play a big role in a lot of these credit card lending businesses. It'll be worth paying attention to see their take on it, looking at the numbers as far as writing down the seriously delinquent debt and that could give us a little bit of an idea of what maybe we could expect here in this coming year because those are big numbers and we know that overall credit card debt in the US is well over $1.1 trillion now, which is, you know, all time highs. Really. I mean that's again, it's okay for your higher earners, but we are definitely seeing those lower earners really, really start to feel stretched.

Dylan Lewis (7:30)

Yeah. Going to that idea of the kind of bifurcated consumer where you have high earners generally doing well, lower income earners struggling a bit more. Do you see that playing out with retailers and basically it being dependent on who their audience is for what results might look like for 2025.

Jason Moser (7:47)

I mean, I think that's, I think that's what we have to keep an eye on. That's the first market that really comes to mind is just general retail, but discretionary spending and I mean you're going to see pockets where, where some continue to perform well. I mean companies, you know, Lululemon is one that stands out to me that even, even in a period like this one, I mean, and they do favor sort of that higher price point, they might fare well or at least get through this okay because their customer is, is a little bit more towards that higher earner class. But, but I mean, definitely discretionary spending in general. I think, you know, watching the performance of companies like Target and Walmart and hearing their language on these earnings calls in regard to the state of the consumer, because we've certainly seen a lot of those higher earners also start focusing more on value in shopping at places like Walmart and Target that are so good at offering that value.

Dylan Lewis (8:38)

All right, so that's our sneak peek at the consumer for 2025. Maybe not the most optimistic view, but I think one worth paying attention to. We also got a sneak peek at what Alphabet has in store for the new year. CEO Sundar Pichai giving a strategy meeting with his team ahead of the new year and a little bit of preview of things to come. The major themes from the news outlets. Jason, this is a disruptive moment with AI. We have mounting antitrust pressure. Which of those two do you want to dive into first?

Jason Moser (9:08)

Well, I mean I, I think AI is probably the one that interests people more. I mean the, the antitrust stuff is, is probably going to drag on for a while and, and we're not going to, you know, ultimately how that all works out because feels like there's going to be a lot of litigation involved there, but, but kind of going back to that, to that market performance, you know, these last several days of the year and going into 2025, you know, we've seen just such a tremendous amount of spend on AI from companies all over and it's, it's becoming a little bit more imperative that they actually show that they actually prove to us exactly how AI is going to make our lives better. And it certainly seems like, like Alphabet, it seems like they are really taking this very seriously, calling 2025 the year where they really, they really need to, to focus up on it in, in prove that value proposition, so to speak. And I think the early signs at least, you know, in regard to a company like Alphabet and let's just call it Google because that's what most people know it as.

Dylan Lewis (10:10)

Easy.

Jason Moser (10:10)

Yeah. I mean, Google. What do we know Google for? Right. It's search. And a big question mark has been sort of, how are these large language models, these chatbots, so to speak, how are they going to impact Google's core advertising business? Right. Is search going to go away? And I tend to view it a little bit more as an evolution. I don't think search is going away. I think it's just evolving. Right. I mean, I grew up in the day, the encyclopedia Dylan. So my version of search back then was having to Crack Open these 50 compound books in search for the information that I was looking for as opposed to now. Or I could just, you know, hammer in a, a little search bar what I'm looking for and it just comes up in an instant. So we're seeing the evolution, I think, of search. And so search is going to, it's going to be a little bit different. We're going to do it a little bit differently. And it seems like Google is starting to really work on, on ways to bring AI into their universe. Because remember, Google isn't just search. I mean, they have a lot of properties with billions upon billions of users. That is, that is a tremendous competitive advantage and it gives them a lot to work with.

Dylan Lewis (11:19)

I think what's interesting is you could view what we are seeing with generative AI as a humongous existential threat to a company like Google. But you could also look at the way that they are answering it and they are very clearly spreading their bets across different approaches to how people interact with information. We've seen the AI overviews from, for search in the more traditional sense, where you put something into their search bar as part of the Search results, you're getting the AI overviews. We've seen them also push this Gemini app. They expect it to be one of the next really big apps for them as a competitor to Chat GPT. They've also been pushing a little bit into agentic AI with their Project Mariner offering, which is very prototypey, very researchy. But the idea is you would have within the Chrome browser a AI agent who is able to do things for you on your behalf, kind of like an assistant. And so I don't think that they are making a singular bet on the direction of getting information. They're trying to see what the marketplace wants and kind of what users want.

Jason Moser (12:23)

Yeah, I think that's spot on. I mean, I think that's, that's the beauty of it. You're right. They could look at this, this AI opportunity as, as a threat. Right. But I think they're, they're viewing it as an opportunity with all of these different platforms. They can find ways to bring value to make those platforms more friendly and easier to use. I mean, as someone who's gone in there and fiddled around with Gemini and I mean, it's something very similar to, you know, a chat GTP or a GPT, whatever. It, it all kind of does the same thing, but, but you could see them starting to incorporate that functionality that, that, that, that ability into more of their platforms, whether it's Gmail or Maps or Google Drive or what have you. So I think that's, that's the nice thing there. And the other thing to remember too is I think in regard to AI, you know, this isn't a Google specific problem. I mean, this is something that companies everywhere are really having to tackle how to bring AI into their businesses, how to, how to bring AI into their business models and ultimately capitalize from it. It reminds me a little bit of back in the day when Facebook first came public and we were talking about the challenges for Facebook going mobile. Would they be able to do it? Everybody was so used to using Facebook through that laptop sort of environment there. And again, that wasn't really a Facebook specific problem either. Right. Everybody was trying to figure out how to tackle mobile because that's the way we do so much now. And, and so I don't look at this necessarily as just a Google specific problem. And I think one of the advantages that they do have is they have so many platforms with so many users, they're going to be able to test and learn a lot. I would be more concerned if they were just kind of spinning their wheels or not really doing anything. But it really does sound like they're making a lot of efforts to try a lot of things, test and learn, you know, continue on with the things that are working, abandon the things that are not. So as a Google shareholder, as someone who's recommended the stock and some of our services here, the four fool, I, I'm going to take the glass half full perspective here. I'm going to hang on to my shares. I think that they've got something good here. And again, I think another neat thing about Google is if you go back 10 years, advertising was well over 90% of their business. That's come down over the years. Now it's around 75%. And so they're making their money a number of different ways now, and a lot of that comes from subscriptions. And I think they'll find out ways to, to monetize things like Gemini and Good Time.

Dylan Lewis (14:46)

All right, Jason, it is our final show together for 2024 and we have, I think as I look at my watch, about 32 hours until the clock strikes midnight here on the east coast takes us into 2025. That means we have a little bit over a day to decide how are we going to be better in the new year. So I'm curious, what are your resolutions?

Jason Moser (15:05)

Better as investors or better as people? I. Let's, let's try both. So I always, Ian, I'm going to give a verbal nod here to Tim Hansen because he's, he's the one that, that brought this to my, to my attention several years back. He always liked to make the resolution at the beginning of the year to not sell anything. And I always just like that perspective going into that year and hoping, you know, just let's, let's not, let's not be too active. Right. Sometimes the best action is, is inaction. And so I do like that idea. Now I mentioned I probably am going to have to sell a little bit here or there throughout the year just to shore up some final finances for college tuition for my girls. But that was always the plan, right? Investing ultimately is a means to many ends. So I'm not going to make that resolution this year, but I'm going to try to minimize at least that selling and always keep that at the top of mind. I do want to introduce at least three new companies to my portfolio this year as I get older and I start focusing a little bit more on bringing more dividend players into my, in, into my portfolio. I think I'd really like to be able to Introduce three new stocks into my portfolio this year. And then finally, just on a personal note, I mean, just. Just trying to be a better person. I can be a pessimist at times. I mean, I know that's hard to believe, but. Dylan, it's true.

Dylan Lewis (16:22)

No, you.

Jason Moser (16:24)

I want to make a concerted effort to wake up each day on the right side of the bed and keep a positive perspective. I just think it's more productive. I think it impacts the people around us in, in a good way. And so I'm really. I just, I want to continue to make that effort, try to just approach each day with a fresh, positive perspective.

Dylan Lewis (16:44)

Well, you bring plenty of positivity to me here on the show. I'm always happy to be taping with you. I always feel like there's a sunny disposition coming through. And if there's more of that in our future for 2025, I'm mighty happy about that.

Jason Moser (16:56)

Well, what about you? I mean, you got any resolutions on your radar? Anything you're trying to do as an investor or a person?

Dylan Lewis (17:01)

You know, I've always found that I'm better off when I have a. A system rather than a wish, if that makes sense. And so, you know, something like talk to my relatives more does not wind up really manifesting in a very. But if I could do something like, hey, I want to call a family member or friend once a week, then I, I tend to have a better chance of having something that works and sticks. I think my resolution is I have found this is not investing one, but I have a very good weekly rhythm to the way that I do things. There's the Sunday shop, Big Cook set things up for Monday through Wednesday. I haven't found a good daily routine and good daily rhythm, and I'd like to bring a little bit more stability and structure into my day so that I can be kind of, kind of what you were saying before, a little bit more prepared, a little bit more positive, a little bit better to the people around in my life. And so, yeah, it feels like that.

Jason Moser (17:51)

Daily rhythm was a lot easier when we were going in the office every day. There was just. There was a pattern. Right. A structure. And it's a little bit different now when you're, when you're working from home.

Dylan Lewis (17:59)

Yeah. And so if any listeners have suggestions for that daily rhythm, for that daily routine, podcastsool.com is where you can reach out and send those. And really, we want to hear your resolutions, too. Money related, not related. We want to know what they are. Jason Moser, thanks for joining me for the final time in 2024.

Jason Moser (18:14)

Well, thank you. I appreciate it. And happy New Year to all of the listeners. Thanks so much for listening.

Dylan Lewis (18:22)

As always, People on the program may have interest in the stocks they talk about, and the Motley fool may have formal recommendations for or against. So don't buy sell anything based solely on what you hear. All personal finance content follows multifool editorial standards and is not approved by advertisers. Motley fool only picks products and to personally recommend to friends like you for the final time in 2024. I'm Dylan Lewis. Thanks for listening. We'll see you tomorrow.