Transcript
Progressive Insurance (0:03)
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Candy Valentino (1:15)
Hey guys, welcome back to the show. I'm Candy Valentino. Thanks for tuning in with me today. And today we are diving into the latest breaking news topics and headlines that are shaping up the business and finance world. We've got a lot to cover. The new tariffs go in effect today. As I am recording this, Elon Musk we just heard may be departing from Washington, the Tesla stock. We've also got to talk about Amazon's bid to acquire TikTok and most importantly, the big picture behind all of this that you need to know about. So let's get right into it. First up, I want to make sure that we talk about this continued talk on how to navigate the tariff era. I talked about this two weeks ago on the show. I asked many of you if you like this type of content and a lot of you actually reached out saying that you wanted more of this. So we're actually going to bring this into the show once a week. We are doing a very timely recording. It actually took me a minute to agree to this with the network because it requires me to do this very much in the minute right before we drop the episode. But you guys liked it. I think it's a lot of fun. I'm paying attention to it anyways for my own investments and my own businesses. So why not share it with all of you so that we can strip away the fear, the worry, the concern, and actually give you the information what it means to you and your business so that you can make the best decisions that affect you, your family and your bottom line. So as we know, this tariff talk has continued. In April 2, President Trump declared as Liberation Day. The implementation of tariffs is again, like I said two weeks ago, it's really promoting the US Manufacturing boom again. It's addressing what this administration is seeing as very unfair trade practices in our country and really creating us to be self sustainable in the global market, addressing a lot of potential security concerns that there could be if we don't do a lot of these things that they're intending to do. So these tariffs that are on Liberation day are basically 25% on automobiles, steel, aluminum, pharmaceuticals, computer chips. This will impact trade with China, Canada, Mexico, the eu and we're already seeing countries responding today. So I don't want to get into the weeds of both sides of economists and their thoughts. The goal here is to generate an additional $600 billion annually outside of our Internal Revenue Service. So outside of the irs, of how we're taxing our own citizens, this is a goal to generate income from outside of our own people. However, it's also going to do a lot of other things that I want to get into in a minute. But first, so that you understand both sides, because my, my point is this. I like to give you as much as I possibly can because of course I have my own opinions, which I will share. But I also like to give you the other side so that when you're ever in conversation or you hear the other side, you can at least understand their position and even see some of the truth or some of their perception of why they think that. So a lot of economists that are saying that this is an economic disaster warns of potential economic downturns, increase consumer costs, it's going to destroy the middle class, it's going to increase inflation, it's going to disrupt our trade relationships, the markets are going to be volatile, which we've seen, they have been. Investors obviously aren't going to be sure of what they're going to invest in. A lot of pensions and retirements are going to diminish. Right. That's what the other side is saying. And I want to take a step back. I want to look at the bigger picture of this because everyone, like I shared two weeks ago, if you look at this in a very isolated metric, if you're just looking at this one thing and you're not looking at the whole picture, you can miss what's also going on. In just 60 days, the US has secured, I believe it just toppled $4 trillion. $4 trillion in global investments in trade commitments over the next several years. And these are not small chunks of change. I shared before Apple, $500 billion and not in like 10 years. By 2026, they are planning a massive factory in Texas and committed to creating 20,000American jobs. SoftBank pledged a hundred billion. Stargate, which is Oracle and Open AI investing 20 billion in new US data centers, Taiwan Semiconductors, which I mentioned before on the show. We need them. We buy so many chips from them to power so many things. They are committing to $100 billion in manufacturing in the US Nvidia hundreds of millions of dollars. There are furniture manufacturers that are leaving Canada and building new facilities in North Carolina. Johnson and Johnson, 55 billion in the U.S. hyundai, Hyundai, GE, aerospace. There's so many. I could go on and on types of investments is part of the overall strategy to build the US middle class, to build manufacturing jobs back to stabilize our economy not just in the short term, but long term. That's why this is not a short term play. The goal is truly long term economic strength. And those who weather this period of uncertainty in market and stay the course are really the ones that are likely to reap the rewards. As the US economy stabilizes, manufacturing jobs return, those investments start pouring in. And here's the critical takeaway for investors, for entrepreneurs, for anyone really wanting to achieve anything. Great. I want you to get this. Short term pain precedes long term gain. If Warren Buffett was on here right now, I could tell you I've heard him say this. I've shared it with many friends. He always says if you are inclined to sell your investments when the market dips, you shouldn't be investing in the first place. And he uses this great analogy about a house. Basically, if you have your house on the market, you know what it's worth. You've done the comps. Everybody shares that this is the true value. And you've not just overpriced it because you think the market is one way, but you don't have any data to sort support it. And somebody comes in and offers you less for your house just because you're not going to sell it unless you have to. But if you don't have to, you're either going to hold it until it does, somebody does come along and wants to pay the value, or you're going to make additional investments to increase the value. I want you to get that. The same applies here. Investors who stay the course and can weather the volatility, the ones that see that if this company was strong at the beginning of this, all of this instability in the market that's affecting all of the stock prices eventually will stabilize. So if I'm able to buy down in those specific sectors or companies or markets that I think are going to stabilize because just four months ago they were doing great, then I'm able to buy it at a discount. I'm able to sell, stock up, if you will. Those investors, my friends, those are the ones that are going to reap major rewards when the stability returns. And that is when you're going to see exponential growth because everybody else exited the market with really scared money. And then as it starts to come up, they start investing back into the market. And then your shares, your investments grow as that new money enters the market, as it returns to be a bit more bullish. Now, how do we know, how do we know that some of these companies are going to potentially return? How do we know that the tariffs are not going to wreck the stock market forever and our investments are all going to go in the crapper once and for all? Well, I always like to look at the data. Let's look at historical context. When we look at Trump's first term, we see this playbook and we actually see it playing out when we reflect on that first term. In 2018, he implemented tariffs on all sorts of things from solar panels to washing machines and eventually led to these retaliatory measures from trading partners which then escalated into a trade war. Does Anyone remember it? 2018, 2019 before COVID Does anyone remember a trade war? Does anyone remember cost of goods to run your business, run your household being so exponentially expensive? If you didn't, you're not alone because even the Federal Reserve bank of Boston estimated that the 2018 tariffs contributed approximately 0.1%, 0.1 to the core PCE which is the personal consumption expenditures. It's an inflation metric. The New York Federal Reserve came out in 2019 and said this trade war in China is going to cost the average American around $831 more. All of the talk created investor uncertainty. The Dow Jones fell, markets pulled back and then click into 2019 the stock market reached all time record highs. I just wanted to highlight this episode.
