1 00:00:33,560 --> 00:00:40,960 Suze: August 7th 2022 Good morning everybody and welcome to Suze 2 00:00:40,960 --> 00:00:44,750 Suze: School on the Women and Money podcast and Everybody smart 3 00:00:44,760 --> 00:00:46,280 Suze: enough to listen 4 00:00:46,920 --> 00:00:47,820 Suze: Now... 5 00:00:48,760 --> 00:00:52,550 Suze: Suze school today is going to be a look back 6 00:00:52,560 --> 00:00:58,180 Suze: in history, What's going on today and why I've said 7 00:00:58,180 --> 00:01:02,340 Suze: to all of you, I'm a little bit concerned and 8 00:01:02,340 --> 00:01:05,310 Suze: I'm concerned because so many of you are writing me 9 00:01:05,319 --> 00:01:08,090 Suze: and you know what you're saying to me, you are 10 00:01:08,090 --> 00:01:08,920 Suze: saying 11 00:01:09,200 --> 00:01:12,340 Suze: that the market has hit the bottom and we are 12 00:01:12,340 --> 00:01:16,080 Suze: in a bull market now. It's a V shaped recovery Matt. 13 00:01:16,080 --> 00:01:18,449 Suze: I think that's you that writes in and says we 14 00:01:18,450 --> 00:01:21,720 Suze: are in a V shaped recovery and it's going straight 15 00:01:21,730 --> 00:01:23,360 Suze: up from here. 16 00:01:24,080 --> 00:01:26,850 Suze: I don't think so. 17 00:01:27,480 --> 00:01:31,580 Suze: And whether we're in recession or not in recession or 18 00:01:31,580 --> 00:01:35,360 Suze: we're going into recession, we have to look at this 19 00:01:35,360 --> 00:01:41,610 Suze: world very, very differently than we've ever looked at it before. 20 00:01:42,180 --> 00:01:45,470 Suze: So even looking back at what happened in the past 21 00:01:45,569 --> 00:01:48,780 Suze: and what the past tells us about this market and 22 00:01:48,780 --> 00:01:51,510 Suze: what all these analysts are saying in the charts and 23 00:01:51,510 --> 00:01:55,410 Suze: this and that. I just want us to sit down 24 00:01:56,270 --> 00:02:00,760 Suze: Relax and take a look at really what's happening in 25 00:02:00,760 --> 00:02:06,700 Suze: this world and how does that affect each and every 26 00:02:06,710 --> 00:02:10,109 Suze: one of us in my opinion, because this is so 27 00:02:10,110 --> 00:02:12,910 Suze: much more than just the stock market and it's your 28 00:02:12,910 --> 00:02:17,000 Suze: 401K or retirement plans or stock portfolio going up. 29 00:02:17,460 --> 00:02:21,470 Suze: It's really are we gonna have enough gas to put 30 00:02:21,480 --> 00:02:24,260 Suze: in our cars and to make everything that needs to 31 00:02:24,260 --> 00:02:27,040 Suze: be made with energy? Are we going to have enough 32 00:02:27,040 --> 00:02:32,320 Suze: food in the shelves to eat? Is it possible that 33 00:02:32,320 --> 00:02:36,490 Suze: we could have a worldwide shortage on food? Is it 34 00:02:36,490 --> 00:02:39,450 Suze: possible that we're not going to have the chips and 35 00:02:39,450 --> 00:02:43,570 Suze: the right materials to put into our cars and create 36 00:02:43,580 --> 00:02:46,760 Suze: electric cars and all these other things 37 00:02:47,330 --> 00:02:51,590 Suze: that affect each and every one of us. And inflation 38 00:02:51,600 --> 00:02:54,730 Suze: of course affects each and every one of us. And 39 00:02:54,730 --> 00:02:59,240 Suze: I get that everybody is predicting that inflation is going down. 40 00:02:59,370 --> 00:03:02,419 Suze: Look at the price of everything, look at the price 41 00:03:02,430 --> 00:03:06,150 Suze: of gasoline. Well, why is gasoline going down? 42 00:03:07,090 --> 00:03:10,679 Suze: We're going to have to talk about that today. Also. 43 00:03:10,680 --> 00:03:14,930 Suze: I am going to go briefly into why I said 44 00:03:14,940 --> 00:03:17,840 Suze: on the other day in a podcast, I don't remember 45 00:03:17,840 --> 00:03:20,480 Suze: when I said it, but it was recently which is 46 00:03:20,480 --> 00:03:24,550 Suze: why if you own XLE which is the E T 47 00:03:24,550 --> 00:03:27,850 Suze: F for the oil industry which has done very well 48 00:03:27,850 --> 00:03:31,330 Suze: for the majority of you, even though it is down 49 00:03:31,330 --> 00:03:33,639 Suze: from its high at 90 something 50 00:03:33,840 --> 00:03:37,130 Suze: Many of you are writing but Suze, I still have 51 00:03:37,130 --> 00:03:40,710 Suze: a 35% profit in it. Are you sure you want 52 00:03:40,710 --> 00:03:42,810 Suze: me to get out of it or whatever it is, 53 00:03:42,820 --> 00:03:48,680 Suze: why I'm suggesting that just maybe given what's happening with oil, 54 00:03:48,760 --> 00:03:51,690 Suze: that if you want to stay in that industry that 55 00:03:51,690 --> 00:03:56,360 Suze: Devon or Pioneer might be a better place for you 56 00:03:56,360 --> 00:04:01,190 Suze: to be and I will explain why on that as well. 57 00:04:01,300 --> 00:04:02,520 Suze: So 58 00:04:03,020 --> 00:04:05,570 Suze: are you ready? Are you sitting down, 59 00:04:06,380 --> 00:04:08,430 Suze: are you walking with me on a walk? 60 00:04:09,080 --> 00:04:12,000 Suze: It's funny, my niece Alexis the other day said she 61 00:04:12,000 --> 00:04:15,720 Suze: was listening to Thursday's podcast and she said something that 62 00:04:15,720 --> 00:04:19,680 Suze: I was not feisty, but I was like yeah, coming 63 00:04:19,680 --> 00:04:22,990 Suze: at people and I said why did you say that? 64 00:04:23,000 --> 00:04:25,780 Suze: And she said because you said to somebody, it was 65 00:04:25,779 --> 00:04:27,219 Suze: a stupid question, 66 00:04:27,760 --> 00:04:29,920 Suze: and if I said it was a stupid question, I 67 00:04:29,920 --> 00:04:33,160 Suze: don't mean it was a stupid question. I mean because 68 00:04:33,160 --> 00:04:36,279 Suze: none of your questions are stupid, it was a stupid 69 00:04:36,279 --> 00:04:40,430 Suze: thing to do. Just that simple, but I'll try not 70 00:04:40,430 --> 00:04:44,130 Suze: to be quite as feisty because you just also love 71 00:04:44,140 --> 00:04:49,680 Suze: Ms Travis's sweetness and naivete on some level and a 72 00:04:49,680 --> 00:04:53,490 Suze: heart that's bigger than the world has ever seen. 73 00:04:53,740 --> 00:04:57,200 Suze: But it's a really wonderful contrast because you know, not 74 00:04:57,210 --> 00:05:04,489 Suze: everything happens out of sweetness. Everything happens when it's grounded 75 00:05:04,490 --> 00:05:09,260 Suze: in the truth, the truth of what's real. And I 76 00:05:09,260 --> 00:05:13,220 Suze: don't have a filter. I just say what I think 77 00:05:13,230 --> 00:05:16,330 Suze: at the moment that I'm thinking it, which is what 78 00:05:16,330 --> 00:05:21,230 Suze: makes me Suze Orman. So for now let's go back 79 00:05:21,240 --> 00:05:22,330 Suze: in time 80 00:05:22,960 --> 00:05:28,640 Suze: and think about why did we have such low inflation 81 00:05:28,650 --> 00:05:32,910 Suze: for so long. Why were all of you able to 82 00:05:32,910 --> 00:05:37,390 Suze: enjoy going into Walmart and all these stores that was 83 00:05:37,390 --> 00:05:40,659 Suze: selling everything at such lower prices. 84 00:05:41,010 --> 00:05:44,740 Suze: So even though your wages weren't keeping up with things? 85 00:05:44,870 --> 00:05:48,500 Suze: The things that you were buying were going down in cost. 86 00:05:48,510 --> 00:05:52,969 Suze: So you were able to maintain your same level of living. 87 00:05:53,120 --> 00:05:55,650 Suze: Why was that true? 88 00:05:56,250 --> 00:06:02,169 Suze: Really? It's for three reasons and the three reasons are 89 00:06:02,660 --> 00:06:04,860 Suze: number one immigrant labor. 90 00:06:05,529 --> 00:06:11,200 Suze: We could produce things here in the United States for 91 00:06:11,210 --> 00:06:14,839 Suze: so little like your food supplies and things because we 92 00:06:14,839 --> 00:06:20,909 Suze: had immigrant labor that we were paying such insulting wages to. 93 00:06:20,910 --> 00:06:24,780 Suze: It's not even funny, but because of that labor, it 94 00:06:24,779 --> 00:06:27,470 Suze: kept many areas of the economy down. 95 00:06:29,250 --> 00:06:30,140 Suze: China, 96 00:06:30,870 --> 00:06:37,750 Suze: China played a pivotal role for years. Why inflation was 97 00:06:37,750 --> 00:06:42,349 Suze: so low? Because in China they could produce for a 98 00:06:42,350 --> 00:06:47,610 Suze: fraction of what we could hear all these goods that 99 00:06:47,610 --> 00:06:49,210 Suze: we wanted to buy. 100 00:06:50,110 --> 00:06:53,770 Suze: So even though again, I'm going to repeat, your wages 101 00:06:53,770 --> 00:06:58,310 Suze: were not going up during this time, a few years ago, 102 00:06:58,810 --> 00:07:03,360 Suze: the cost of goods from China were costing you less. 103 00:07:03,510 --> 00:07:08,540 Suze: So all was great. Everything stayed on that equal basis. 104 00:07:08,710 --> 00:07:11,350 Suze: You felt like you were living a life that you 105 00:07:11,350 --> 00:07:15,720 Suze: could afford. Everything was good. Obviously not for everybody, but 106 00:07:15,720 --> 00:07:18,820 Suze: for the majority of you, you were able to live 107 00:07:18,830 --> 00:07:20,620 Suze: the life you wanted to live 108 00:07:21,550 --> 00:07:23,730 Suze: Next. Russia, 109 00:07:24,800 --> 00:07:31,430 Suze: Russia was selling gas for really, really cheap to Germany 110 00:07:31,440 --> 00:07:35,900 Suze: and Europe. Now, how does that affect you? I'll tell 111 00:07:35,900 --> 00:07:37,220 Suze: you that in a second 112 00:07:37,810 --> 00:07:43,000 Suze: because they were able to sell things to Germany and 113 00:07:43,000 --> 00:07:45,280 Suze: Europe for so cheap gas? 114 00:07:46,120 --> 00:07:50,160 Suze: What happened was that Europe and Germany was able to 115 00:07:50,160 --> 00:07:54,900 Suze: manufacture stuff and do things and export them to us 116 00:07:54,900 --> 00:07:59,950 Suze: really for pennies on the dollar. So it kept everything 117 00:07:59,960 --> 00:08:06,210 Suze: in sync Europe, Germany, they were great, China was great 118 00:08:06,370 --> 00:08:10,570 Suze: over here because of immigrant labor. We were great. 119 00:08:12,140 --> 00:08:17,120 Suze: So that was immigrants, Russia and China. 120 00:08:18,020 --> 00:08:23,750 Suze: And now we are in an economic war almost with 121 00:08:23,760 --> 00:08:26,960 Suze: all three of those sectors, 122 00:08:27,580 --> 00:08:32,430 Suze: China is so aggravated with us right now Russia because 123 00:08:32,429 --> 00:08:36,040 Suze: of the sanctions that we have put on them and 124 00:08:36,040 --> 00:08:39,610 Suze: the money and the weapons that are being sent to Ukraine, 125 00:08:39,670 --> 00:08:46,439 Suze: Russia is weaponizing things because Germany and Europe has also 126 00:08:46,440 --> 00:08:50,110 Suze: joined in. They're not going to be selling gas anymore 127 00:08:50,120 --> 00:08:51,630 Suze: to Europe. 128 00:08:52,200 --> 00:08:56,570 Suze: And what that's gonna do is that's gonna put Europe, 129 00:08:56,580 --> 00:09:02,150 Suze: Germany and everybody in a total recession and that of 130 00:09:02,150 --> 00:09:08,240 Suze: course is going to absolutely affect us. So we are 131 00:09:08,260 --> 00:09:11,730 Suze: in a whole different type of war right now. Everybody 132 00:09:12,100 --> 00:09:17,650 Suze: We're in an economic war with the three entities, whether 133 00:09:17,650 --> 00:09:23,520 Suze: it's immigrant Russia, china that were holding everything down inflation 134 00:09:23,520 --> 00:09:26,960 Suze: down here in the United States because of how they 135 00:09:26,960 --> 00:09:28,330 Suze: were operating. 136 00:09:29,020 --> 00:09:33,910 Suze: We have now turned them especially Russia and China into 137 00:09:33,920 --> 00:09:35,880 Suze: our enemies 138 00:09:36,770 --> 00:09:42,700 Suze: and as enemies, they don't fight anymore really with weapons 139 00:09:42,710 --> 00:09:46,500 Suze: of destruction. They're not really looking even though they threaten 140 00:09:46,500 --> 00:09:50,620 Suze: it to drop a bomb or do whatever they now 141 00:09:50,630 --> 00:09:52,510 Suze: are going to war 142 00:09:53,110 --> 00:09:59,060 Suze: with commodities and holding supplies that we need and when 143 00:09:59,059 --> 00:10:02,939 Suze: they hold the things that we need from them, because 144 00:10:02,940 --> 00:10:09,670 Suze: we became so dependent on them all that affects inflation. 145 00:10:10,580 --> 00:10:14,429 Suze: So we really need to pay attention to how these 146 00:10:14,429 --> 00:10:20,460 Suze: three great powers, China Russian and the United States. Now 147 00:10:20,480 --> 00:10:26,210 Suze: they resolve their intense disagreements with each other. And if 148 00:10:26,210 --> 00:10:30,930 Suze: you ask me, it doesn't look like the United States 149 00:10:30,940 --> 00:10:35,370 Suze: is able to do that. Russia and China are forming 150 00:10:35,380 --> 00:10:36,280 Suze: a bond 151 00:10:36,860 --> 00:10:40,880 Suze: so they're getting stronger as two entities. And it just 152 00:10:40,880 --> 00:10:45,860 Suze: seems like the United States is not part of that. 153 00:10:46,750 --> 00:10:47,620 Suze: So 154 00:10:48,190 --> 00:10:53,579 Suze: has inflation peaked inflation that affects absolutely everything. 155 00:10:54,130 --> 00:11:00,650 Suze: Only time will tell. But I do think that inflation 156 00:11:00,660 --> 00:11:05,460 Suze: is here to stay for quite a while now. If 157 00:11:05,460 --> 00:11:11,790 Suze: inflation is still above 8% at the year end, what 158 00:11:11,790 --> 00:11:15,450 Suze: does that mean? What that means is and I personally 159 00:11:15,450 --> 00:11:19,570 Suze: think it will be above 8% at the year end. 160 00:11:19,830 --> 00:11:22,020 Suze: It means that the Feds are going to have to 161 00:11:22,020 --> 00:11:27,520 Suze: continue to raise the Fed funds rate because you are 162 00:11:27,520 --> 00:11:31,130 Suze: still out there and absolutely still spending, 163 00:11:31,770 --> 00:11:35,780 Suze: They haven't been able to crush the demand in the 164 00:11:35,780 --> 00:11:39,030 Suze: way that they really want to. So if at the 165 00:11:39,030 --> 00:11:42,300 Suze: end of the year inflation is still at 8%,, 166 00:11:42,890 --> 00:11:46,790 Suze: then it's very possible the Feds are going to have 167 00:11:46,790 --> 00:11:50,720 Suze: to raise interest rates even more than they are projecting 168 00:11:51,290 --> 00:11:55,090 Suze: that they are going to have to do next. What 169 00:11:55,090 --> 00:11:56,080 Suze: concerns me 170 00:11:56,840 --> 00:11:58,200 Suze: is the yield curve 171 00:11:59,120 --> 00:12:03,280 Suze: Now the yield curve has to do with Treasury notes. Now, 172 00:12:03,280 --> 00:12:06,490 Suze: I've told all of you in the past, especially when 173 00:12:06,490 --> 00:12:10,350 Suze: yields were up by a two year Treasury note by 174 00:12:10,350 --> 00:12:13,480 Suze: a five year Treasury note. Lock in those rates when 175 00:12:13,480 --> 00:12:16,270 Suze: they were in the 3% area. 176 00:12:17,090 --> 00:12:22,479 Suze: Now, normally you would expect to get less of a 177 00:12:22,480 --> 00:12:26,570 Suze: yield for a two year Treasury note than you would 178 00:12:26,580 --> 00:12:30,530 Suze: a 10 year Treasury note. And the reason that is, 179 00:12:30,540 --> 00:12:33,580 Suze: is because when you lock up your money for a 180 00:12:33,580 --> 00:12:38,180 Suze: longer period of time and 10 years is obviously longer 181 00:12:38,179 --> 00:12:39,860 Suze: than two years, 182 00:12:40,720 --> 00:12:43,420 Suze: you would be paid more for that. 183 00:12:44,130 --> 00:12:49,980 Suze: And therefore a normal yield curve would be the shorter 184 00:12:49,990 --> 00:12:52,190 Suze: the maturity of the Treasury. 185 00:12:52,980 --> 00:12:55,840 Suze: The less of an interest rate that you would get 186 00:12:55,850 --> 00:13:00,240 Suze: versus the longer term of a Treasury. 187 00:13:00,850 --> 00:13:05,450 Suze: And usually they measure that yield curve and it should 188 00:13:05,460 --> 00:13:09,140 Suze: look like it's going up like a half of a. U. 189 00:13:09,230 --> 00:13:12,840 Suze: It starts down low and it goes up longer over 190 00:13:12,840 --> 00:13:16,400 Suze: a period of time. Does that make sense to you? 191 00:13:16,410 --> 00:13:17,970 Suze: I hope it does. 192 00:13:18,920 --> 00:13:24,689 Suze: The yield curve always wants to look like that you, 193 00:13:24,690 --> 00:13:28,340 Suze: so to speak, The longer you go out, the higher 194 00:13:28,340 --> 00:13:33,360 Suze: the interest rates when that yield curve inverts 195 00:13:34,050 --> 00:13:38,010 Suze: and you get a higher interest rate for shorter term 196 00:13:38,010 --> 00:13:41,490 Suze: maturities than you do longer term 197 00:13:42,080 --> 00:13:47,880 Suze: traditionally. That has always been an indication that recession is 198 00:13:47,890 --> 00:13:52,960 Suze: on its way or it's already here. And we have 199 00:13:52,960 --> 00:13:56,750 Suze: had an inverted yield curve Now for quite a bit 200 00:13:56,750 --> 00:13:57,560 Suze: of time 201 00:13:58,100 --> 00:14:03,400 Suze: as I'm recording this, the two year Treasury note is 202 00:14:03,400 --> 00:14:11,520 Suze: paying 3.19% great rate. Everybody but the 10 year is 203 00:14:11,530 --> 00:14:17,820 Suze: only paying 2.77%. Now, I could give you all the 204 00:14:17,820 --> 00:14:21,550 Suze: different rates of all the different maturity ease. But normally 205 00:14:21,550 --> 00:14:26,270 Suze: we look at the two year versus the 10 year. 206 00:14:26,960 --> 00:14:34,310 Suze: That is a big, big difference, a big difference between 207 00:14:34,320 --> 00:14:35,550 Suze: the two of them. 208 00:14:36,290 --> 00:14:39,140 Suze: So when that difference is so large, 209 00:14:39,950 --> 00:14:46,310 Suze: that's an indicator that a recession is absolutely a probability. 210 00:14:46,320 --> 00:14:50,520 Suze: If it stays like this. Now, I get that. Everybody 211 00:14:50,520 --> 00:14:53,800 Suze: is saying we're not going to have a recession. Everybody 212 00:14:53,800 --> 00:14:58,260 Suze: is still spending money, the employment is up there. Everybody 213 00:14:58,260 --> 00:15:00,859 Suze: has a job. Listen, 214 00:15:01,540 --> 00:15:04,480 Suze: we can't judge the past 215 00:15:05,360 --> 00:15:11,050 Suze: as an indicator of what is a recession Now. My 216 00:15:11,050 --> 00:15:15,090 Suze: main concern even more than the yield curve is what 217 00:15:15,090 --> 00:15:19,240 Suze: I started this podcast with, which is what is going 218 00:15:19,240 --> 00:15:24,690 Suze: to happen with Russia, China and the United States. We 219 00:15:24,690 --> 00:15:30,580 Suze: have never been so dependent on Russia and China as 220 00:15:30,580 --> 00:15:32,290 Suze: we are now. 221 00:15:32,860 --> 00:15:38,030 Suze: We gave up our independence. We stopped pumping as much oil. 222 00:15:38,040 --> 00:15:42,120 Suze: We stopped manufacturing as many goods that we sell here. 223 00:15:42,700 --> 00:15:47,000 Suze: So we lost our independence and now are totally dependent 224 00:15:47,010 --> 00:15:51,130 Suze: on two entities that really don't like us very much. 225 00:15:51,700 --> 00:15:54,180 Suze: And that concerns me 226 00:15:54,770 --> 00:16:00,560 Suze: so again, the future in my opinion is still in question. 227 00:16:01,140 --> 00:16:04,680 Suze: The real question is, what is it going to take 228 00:16:04,690 --> 00:16:09,060 Suze: to crush inflation to crush demand? 229 00:16:09,700 --> 00:16:13,990 Suze: So that's just something that we really need to think 230 00:16:13,990 --> 00:16:14,560 Suze: about 231 00:16:15,450 --> 00:16:19,800 Suze: Now. Let's talk a little bit about energy because you 232 00:16:19,800 --> 00:16:23,550 Suze: know I've been talking about energy and energy E. T. F. 233 00:16:23,550 --> 00:16:28,480 Suze: As well as individual stocks really since 2020 in March 234 00:16:29,370 --> 00:16:34,440 Suze: and we really have to understand what has happened here 235 00:16:34,450 --> 00:16:39,070 Suze: and why are gas prices going down and what does 236 00:16:39,070 --> 00:16:41,130 Suze: that mean for us in the future? 237 00:16:42,070 --> 00:16:46,930 Suze: So what happened to energy really was the war in 238 00:16:46,940 --> 00:16:47,750 Suze: Ukraine 239 00:16:48,480 --> 00:16:54,109 Suze: That really sent energy prices over the top? Remember when 240 00:16:54,110 --> 00:16:59,460 Suze: we were in the pandemic energy in March of 2020, 241 00:16:59,490 --> 00:17:04,460 Suze: they had to pay somebody $31 a barrel to take 242 00:17:04,470 --> 00:17:10,270 Suze: energy away. It was negative. Everybody was like nobody's using cars, 243 00:17:10,280 --> 00:17:15,149 Suze: nobody's flying on airplanes, nobody's traveling. So therefore the price 244 00:17:15,150 --> 00:17:18,240 Suze: of energy went down and down and down 245 00:17:18,420 --> 00:17:20,810 Suze: and when something goes down and down and down like 246 00:17:20,810 --> 00:17:24,280 Suze: that that is the time to buy. Which is why 247 00:17:24,280 --> 00:17:28,400 Suze: I told all of you to buy X. L. E. 248 00:17:28,660 --> 00:17:31,840 Suze: To buy it because it was the E. T. F. 249 00:17:31,850 --> 00:17:36,459 Suze: That you could diversify with to absolutely do what get 250 00:17:36,470 --> 00:17:40,450 Suze: a very nice dividend at the time and participate if 251 00:17:40,460 --> 00:17:45,240 Suze: oil was ever to go up. So that's what happened. 252 00:17:46,180 --> 00:17:49,930 Suze: But then energy prices started to go up 253 00:17:50,500 --> 00:17:55,170 Suze: as everything started to return to normal, so to speak. 254 00:17:55,180 --> 00:17:59,830 Suze: People started to travel do things again and they really 255 00:17:59,830 --> 00:18:08,020 Suze: skyrocketed when Ukraine and Russia went to war that sent 256 00:18:08,030 --> 00:18:10,389 Suze: energy prices over the top 257 00:18:10,790 --> 00:18:13,650 Suze: and all the E. T. F. S. And stocks that 258 00:18:13,650 --> 00:18:18,340 Suze: I told you to buy, sky rocketed XLE went all 259 00:18:18,340 --> 00:18:22,180 Suze: the way up into the nineties and all of you. 260 00:18:22,180 --> 00:18:25,550 Suze: I'm sure we're so happy and you loved what was 261 00:18:25,550 --> 00:18:26,540 Suze: going on 262 00:18:27,119 --> 00:18:27,750 Suze: and 263 00:18:28,280 --> 00:18:32,450 Suze: there we were. But what happened after that? 264 00:18:33,160 --> 00:18:38,020 Suze: Is that energy prices started to decline 265 00:18:38,570 --> 00:18:42,880 Suze: Now, why did they start to decline? Because that's a 266 00:18:42,880 --> 00:18:47,050 Suze: really important thing to think about. They decline to like 267 00:18:47,060 --> 00:18:48,710 Suze: $90 a barrel. 268 00:18:49,520 --> 00:18:53,550 Suze: And I know in our heads we all think energy 269 00:18:53,560 --> 00:18:57,110 Suze: is really low. It's said that energy prices are going 270 00:18:57,109 --> 00:19:02,420 Suze: to go down to $80, a barrel. Some people say 271 00:19:02,420 --> 00:19:05,090 Suze: it will go down to $60 a barrel. 272 00:19:05,730 --> 00:19:11,590 Suze: To put things in perspective, $80 or $90 a barrel 273 00:19:11,600 --> 00:19:17,310 Suze: is still incredibly high. It's lower than it was, but 274 00:19:17,310 --> 00:19:21,899 Suze: it's still off the charts high because most of the 275 00:19:21,900 --> 00:19:27,879 Suze: companies make money when oil can go as low as 276 00:19:27,880 --> 00:19:31,439 Suze: $50 a barrel and they're still making money. 277 00:19:32,170 --> 00:19:36,850 Suze: So at $80 or $90 a barrel, they are making 278 00:19:36,850 --> 00:19:41,429 Suze: money hand over fist. Are you all following me? 279 00:19:42,100 --> 00:19:47,189 Suze: The problem is here in the United States, the production, 280 00:19:47,200 --> 00:19:51,490 Suze: the drilling for oil is relatively flat 281 00:19:52,280 --> 00:19:58,680 Suze: but the demand eventually is absolutely going to increase. 282 00:19:59,359 --> 00:20:03,920 Suze: It's going to increase again with China, it's going to 283 00:20:03,920 --> 00:20:07,189 Suze: increase as things continue to open up. 284 00:20:07,720 --> 00:20:11,300 Suze: Even though I know nobody believes that it's going to increase. 285 00:20:11,390 --> 00:20:17,220 Suze: It is and we do not have the supply for it. Now, 286 00:20:17,220 --> 00:20:23,950 Suze: the feds are really trying to crush the demand of oil. 287 00:20:24,490 --> 00:20:27,560 Suze: They want you not to drive, they want you not 288 00:20:27,560 --> 00:20:30,930 Suze: to travel, they want to bring down the price of 289 00:20:30,930 --> 00:20:32,740 Suze: a gallon of gasoline. 290 00:20:33,450 --> 00:20:38,659 Suze: Now, what's interesting is that if you've noticed the price 291 00:20:38,670 --> 00:20:40,860 Suze: of gas has come down 292 00:20:41,440 --> 00:20:45,940 Suze: and the question is, why has the price of gas 293 00:20:45,970 --> 00:20:50,690 Suze: come down? And in my opinion, the price of gas 294 00:20:50,690 --> 00:20:56,070 Suze: is actually come down because the government is releasing oil 295 00:20:56,080 --> 00:20:59,430 Suze: from the Strategic Petroleum Reserve, 296 00:21:00,190 --> 00:21:04,570 Suze: but they only have so much oil in reserve. 297 00:21:05,210 --> 00:21:09,350 Suze: So eventually they are going to have to replace that 298 00:21:09,359 --> 00:21:15,550 Suze: reserve by buying more oil from companies. Are we all 299 00:21:15,550 --> 00:21:16,730 Suze: following me 300 00:21:17,590 --> 00:21:24,250 Suze: now? One more thing? Okay, Europe is absolutely in trouble 301 00:21:24,260 --> 00:21:29,580 Suze: and they are in trouble because Russia has shut off 302 00:21:29,590 --> 00:21:34,800 Suze: gas going to them because Europe and Germany joined in 303 00:21:34,800 --> 00:21:40,260 Suze: with the United States and Russia did not like that. So, 304 00:21:40,260 --> 00:21:43,970 Suze: what are they doing? They are weaponizing rather than bombing them. 305 00:21:43,980 --> 00:21:46,659 Suze: They're weaponizing a commodity. 306 00:21:47,090 --> 00:21:52,170 Suze: And so absolutely. You're going to see Europe go into 307 00:21:52,170 --> 00:21:56,150 Suze: a recession and when they go into a recession that 308 00:21:56,160 --> 00:22:00,360 Suze: also affects us. Okay, so are you following me with 309 00:22:00,359 --> 00:22:03,840 Suze: everything or have I jumped around too much But let 310 00:22:03,840 --> 00:22:07,770 Suze: me go back to the reserve for one second because 311 00:22:07,770 --> 00:22:10,010 Suze: the government reserve is limited 312 00:22:10,830 --> 00:22:15,469 Suze: and more demand is absolutely going to be in the future. 313 00:22:16,210 --> 00:22:20,780 Suze: The government now is trying to negotiate with companies as 314 00:22:20,780 --> 00:22:26,100 Suze: to buying oil from them at a specific price and 315 00:22:26,100 --> 00:22:29,960 Suze: that will mean that oil companies will produce because they 316 00:22:29,960 --> 00:22:32,850 Suze: know they're not going to lose money. Why? Because the 317 00:22:32,850 --> 00:22:36,720 Suze: government will buy it for them at a specific price now, 318 00:22:36,730 --> 00:22:39,960 Suze: where is all this going in regards to you? 319 00:22:40,470 --> 00:22:45,790 Suze: The reason why recently I wanted you to switch from 320 00:22:45,790 --> 00:22:53,890 Suze: possibly XLE to either Devon or Pioneer symbol PXD is 321 00:22:53,890 --> 00:22:57,179 Suze: because remember in the past, I talked to all of 322 00:22:57,180 --> 00:22:59,040 Suze: you about dividends 323 00:22:59,440 --> 00:23:03,869 Suze: and if these markets do start to go up down, 324 00:23:03,880 --> 00:23:06,770 Suze: up down, which is what I think is going to happen. 325 00:23:06,780 --> 00:23:09,970 Suze: I do not think we are straight up from here, 326 00:23:10,090 --> 00:23:12,859 Suze: Maybe we're up for another two weeks or three weeks 327 00:23:12,869 --> 00:23:14,359 Suze: or whatever it may be. 328 00:23:15,119 --> 00:23:17,520 Suze: Are you in the right area of things that are 329 00:23:17,520 --> 00:23:20,800 Suze: going up because not everything is going up, which is 330 00:23:20,800 --> 00:23:24,740 Suze: why I wanted you in index funds like the Vanguard 331 00:23:24,740 --> 00:23:26,700 Suze: Total Stock Market index fund 332 00:23:27,230 --> 00:23:31,960 Suze: so that you absolutely could partake no matter what was happening. 333 00:23:32,990 --> 00:23:35,910 Suze: But the question is, is the market going to go 334 00:23:35,910 --> 00:23:38,790 Suze: straight up from here and continue to go up for 335 00:23:38,790 --> 00:23:42,240 Suze: the next few years. I would bet my bottom dollar 336 00:23:42,240 --> 00:23:43,910 Suze: that it does not 337 00:23:45,180 --> 00:23:47,530 Suze: do. I think that it could obviously go up, like 338 00:23:47,530 --> 00:23:49,680 Suze: I said a few minutes ago for the next month 339 00:23:49,690 --> 00:23:52,950 Suze: or so. Yes, but I also think that there will 340 00:23:52,950 --> 00:23:56,300 Suze: come a time when it turns around and it goes 341 00:23:56,310 --> 00:24:03,060 Suze: back down, especially if we have not contained inflation 342 00:24:03,780 --> 00:24:08,500 Suze: especially if the energy starts to go into demand and 343 00:24:08,500 --> 00:24:09,740 Suze: we don't have enough 344 00:24:10,510 --> 00:24:15,440 Suze: especially if food becomes a shortage. I think that will 345 00:24:15,440 --> 00:24:20,860 Suze: start to affect everything where people stop spending 346 00:24:21,460 --> 00:24:24,619 Suze: earnings of companies start to go down and here the 347 00:24:24,619 --> 00:24:28,030 Suze: market goes down again. Time will tell 348 00:24:28,760 --> 00:24:33,840 Suze: the energy crisis and the energy situation is something we 349 00:24:33,840 --> 00:24:38,370 Suze: need to think about now. The reason why I wanted 350 00:24:38,369 --> 00:24:42,109 Suze: many of you possibly to switch from X. L. E. 351 00:24:42,450 --> 00:24:45,600 Suze: And either take your profit because I do think it 352 00:24:45,600 --> 00:24:49,340 Suze: might continue down or stay right around here is at 353 00:24:49,350 --> 00:24:54,700 Suze: this price which is $73 a share, it's only paying 354 00:24:54,700 --> 00:25:00,000 Suze: you a 3.28% dividend on your money. 355 00:25:00,970 --> 00:25:04,660 Suze: The two energy stocks that I like and may very 356 00:25:04,660 --> 00:25:09,200 Suze: well continue down but I like them because of their 357 00:25:09,200 --> 00:25:14,170 Suze: dividends and we have to look for places where we 358 00:25:14,170 --> 00:25:18,570 Suze: can put money and regardless of the action of the stock, 359 00:25:18,580 --> 00:25:22,270 Suze: whether it goes up or down, we still get a 360 00:25:22,270 --> 00:25:25,679 Suze: good income from that stock. 361 00:25:26,390 --> 00:25:30,890 Suze: Those two stocks right now in my opinion are Devon 362 00:25:31,040 --> 00:25:32,869 Suze: and Pioneer, 363 00:25:33,520 --> 00:25:40,560 Suze: You know Devon recently reported and they have $2.1 billion 364 00:25:40,570 --> 00:25:43,330 Suze: dollars in free cash flow. 365 00:25:43,869 --> 00:25:47,850 Suze: They are really rich with cash. In fact that is 366 00:25:47,850 --> 00:25:52,979 Suze: more cash than they've had in their 51 year history. 367 00:25:53,750 --> 00:26:00,359 Suze: Now. Currently Devon is paying a 10% dividend. Now listen 368 00:26:00,359 --> 00:26:03,350 Suze: to me closely a lot of you will go on 369 00:26:03,359 --> 00:26:07,189 Suze: and you'll look at the dividend that Devon is paying 370 00:26:07,400 --> 00:26:10,250 Suze: and it won't be anywhere near 10%. 371 00:26:10,770 --> 00:26:14,720 Suze: That is because they're giving you a fixed dividend and 372 00:26:14,730 --> 00:26:20,600 Suze: a variable dividend. So every quarter they give you money 373 00:26:20,600 --> 00:26:23,729 Suze: that they want to give you. And it's called a 374 00:26:23,740 --> 00:26:30,550 Suze: variable dividend this month the dividend is a dollar 55 375 00:26:30,560 --> 00:26:34,879 Suze: for every share that you own if you bought dividend 376 00:26:34,890 --> 00:26:39,750 Suze: around now which is about 56 $57 a share 377 00:26:40,160 --> 00:26:46,850 Suze: That's over a 10% dividend, remember dividends are paid quarterly 378 00:26:47,619 --> 00:26:51,950 Suze: so you would take that dollar 55 times it by four. 379 00:26:51,960 --> 00:26:55,870 Suze: Last time it was a dollar 27 dividend. So they 380 00:26:55,869 --> 00:27:00,460 Suze: changed it all the time but it's still seriously high 381 00:27:00,710 --> 00:27:05,180 Suze: now to participate in that dividend you have to be 382 00:27:05,190 --> 00:27:14,440 Suze: owner of record before September 9th 2022 because every stock 383 00:27:14,440 --> 00:27:16,780 Suze: has what's called an ex dividend. 384 00:27:17,210 --> 00:27:21,720 Suze: If you don't buy it by a specific time, it 385 00:27:21,720 --> 00:27:30,960 Suze: will trade without the dividend. And that date is September 9, 2022. 386 00:27:31,260 --> 00:27:34,170 Suze: So if any of you want to participate in that 387 00:27:34,170 --> 00:27:37,890 Suze: dividend and see what happens, you need to own it 388 00:27:37,900 --> 00:27:40,190 Suze: before September 9th. 389 00:27:40,930 --> 00:27:47,320 Suze: So next we have Pioneer, symbol is PXD . They 390 00:27:47,330 --> 00:27:52,880 Suze: currently have the highest dividend in the entire Standard and 391 00:27:52,880 --> 00:27:57,939 Suze: Poor's index and that is a 15% dividend, 392 00:27:58,930 --> 00:28:00,840 Suze: 15%. 393 00:28:01,410 --> 00:28:05,109 Suze: Also, even if oil prices decline, 394 00:28:05,760 --> 00:28:12,580 Suze: Pioneer has 20 years worth of inventory. However, if you 395 00:28:12,580 --> 00:28:16,860 Suze: want to participate in the dividend for Pioneer, which is 396 00:28:16,859 --> 00:28:22,750 Suze: going to be $8.57 a share and it's currently trading 397 00:28:22,750 --> 00:28:26,470 Suze: at $217 a share. Maybe it will go down even 398 00:28:26,470 --> 00:28:29,570 Suze: more before the ex dividend date, but you have to 399 00:28:29,580 --> 00:28:35,150 Suze: own it before September 2nd, 2022. 400 00:28:35,450 --> 00:28:38,330 Suze: So the reason that I wanted many of you to 401 00:28:38,330 --> 00:28:42,270 Suze: possibly look at a change was to increase your dividend 402 00:28:42,270 --> 00:28:46,890 Suze: yield to get more cash for your holding. It wasn't 403 00:28:46,890 --> 00:28:51,330 Suze: necessarily for it to go from 50 to $100 a share. 404 00:28:51,340 --> 00:28:55,320 Suze: I am not looking at this as something where the 405 00:28:55,320 --> 00:28:59,270 Suze: stock goes up. I'm looking at this as two companies 406 00:28:59,270 --> 00:29:03,990 Suze: that have tremendous cash reserves are paying high cash dividends 407 00:29:04,150 --> 00:29:07,590 Suze: And at least our pain you income while you are 408 00:29:07,590 --> 00:29:11,260 Suze: seeing what happens because the truth of the matter is 409 00:29:11,260 --> 00:29:15,480 Suze: especially in many situations, what difference does it make if 410 00:29:15,480 --> 00:29:19,860 Suze: the stock is at 30 versus 90 versus whatever? As 411 00:29:19,860 --> 00:29:23,470 Suze: long as you are getting a great dividend, would you 412 00:29:23,470 --> 00:29:24,910 Suze: sell it anyway? 413 00:29:25,570 --> 00:29:29,850 Suze: No because you're looking for the dividend. That was the 414 00:29:29,850 --> 00:29:35,050 Suze: reason behind my suggestion of X. L. E. That's only 415 00:29:35,050 --> 00:29:39,690 Suze: paying a 3.28% dividend right now, not a bad dividend 416 00:29:39,700 --> 00:29:44,340 Suze: but nowhere near Devon or Pioneer 417 00:29:45,040 --> 00:29:47,580 Suze: up to you. You may decide to sell and not 418 00:29:47,580 --> 00:29:50,430 Suze: want to be an oil anymore. But that was the 419 00:29:50,430 --> 00:29:51,760 Suze: reason behind that. 420 00:29:52,270 --> 00:29:54,640 Suze: I know that was a lot for you to listen 421 00:29:54,640 --> 00:30:00,500 Suze: to and it probably sounds really depressing but it's not 422 00:30:00,670 --> 00:30:03,930 Suze: and it doesn't have to be if you just keep 423 00:30:03,940 --> 00:30:08,260 Suze: a realistic view on what maybe is happening out there 424 00:30:08,810 --> 00:30:12,390 Suze: and so you have your 12 month emergency fund, you 425 00:30:12,390 --> 00:30:16,130 Suze: stay out of debt. You keep dollar cost averaging in 426 00:30:16,140 --> 00:30:18,410 Suze: areas of the market that you want to be in 427 00:30:18,420 --> 00:30:21,540 Suze: or with the vanguard total stock market index fund. In 428 00:30:21,540 --> 00:30:23,920 Suze: fact next Sunday 429 00:30:24,240 --> 00:30:28,460 Suze: I'm going to do an entire Suze School on dollar 430 00:30:28,460 --> 00:30:31,820 Suze: cost averaging and what would have happened to you if 431 00:30:31,820 --> 00:30:35,420 Suze: you had purchased the Vanguard Total stock market index fund 432 00:30:35,430 --> 00:30:40,680 Suze: on the first of every month starting January 2020 and 433 00:30:40,680 --> 00:30:43,970 Suze: what that looks like. So we can see how dollar 434 00:30:43,970 --> 00:30:48,430 Suze: cost averaging really works. But if you have a realistic 435 00:30:48,430 --> 00:30:49,220 Suze: view 436 00:30:49,470 --> 00:30:52,700 Suze: of what's going on in this world and you live 437 00:30:52,710 --> 00:30:56,660 Suze: below your means. But within your needs we can make 438 00:30:56,660 --> 00:31:00,190 Suze: the best out of any situation. I know you can 439 00:31:00,390 --> 00:31:04,880 Suze: so until next Thursday so Ms Travis joins us again. 440 00:31:04,970 --> 00:31:06,960 Suze: There's really only one thing that I want you to 441 00:31:06,960 --> 00:31:09,400 Suze: remember when it comes to your money and that's for 442 00:31:09,400 --> 00:31:14,810 Suze: you to be safe. Strong, secure and smart. Alright, see 443 00:31:14,810 --> 00:31:16,200 Suze: you then, Bye bye.